Barclays has lowered its loan to income multiples to a maximum of 4.49 times income up to 90% loan to value (LTV).
For loans above 90% LTV, where the household income is below £50,000, and where there is a debt to income ratio of 20% or more, the loan to income (LTI) limit will be restricted to 4 times income.
In a note to brokers, Barclays said the changes will apply to new applications, as well as to any application that has been created and not submitted and to those that have been submitted but are yet to receive an offer.
The LTI cut could also affect offered cases where a ‘material change’ has occured, including an increase to the mortgage term, mortgage amount or LTV, as well as a reduction in income or a change in outgoings/expenditure.
In the note, Barclays said, “Please be advised if you do have a case that has not yet gone to offer, we will assess under the new policy and you will be notified of the outcome in the usual way.”
A Barclays spokesperson added, “We regularly review our lending policies and today have made some changes to loan-to-income multiples.”
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