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HSBC UK has introduced a new maximum mortgage loan-to-income (LTI) ratio of up to 6.5 times annual income for its Premier customers. To qualify for HSBC Premier, customers must have an annual income of at least £100,000 paid into an HSBC Premier account, or hold £100,000 or more in savings or investments with the bank. The LTI change means that a Premier customer earning £75,000 per year could borrow up to £488,000 under the new policy, compared with up to £375,000 (5.0 times their income) previously, the bank said. A Premier customer earning £100,000 per year could borrow up to £650,000, compared with up to £550,000 (5.5 times their income) previously. Premier account holders will also need a deposit of at least 10% to potentially be able to borrow the 6.5 times income multiple. Oli O’Donoghue, head of mortgages at HSBC UK, said: “This increase reflects both our confidence in the financial resilience of our Premier customer base and our commitment to responsible, sustainable lending.” Several lenders have made changes in recent months enabling some mortgage customers to borrow more, following moves from regulators. Simon Gammon, managing partner at Knight Frank Finance, said the new income multiple reflects both a more confident regulatory environment “and HSBC’s clear appetite to grow market share”. He said: “The real question is how much this will translate into demand, given the continued uncertainty around potential tax changes in the upcoming Budget.” Nationwide Building Society announced on Monday that it is expanding its interest-only mortgage offering, as well as expanding the range of repayment options that it will accept beyond the sale of the main residence, to include UK-based savings, investments, pension funds and other properties. The society’s interest-only range, available through brokers, will also become open to first-time buyers. Carlo Pileggi, Nationwide’s head of mortgage products, said: “Interest only can be a great option for customers who have a suitable repayment vehicle and want the flexibility provided by lower monthly payments.” Andrew Montlake, chief executive of Coreco mortgage brokers, said of Nationwide’s announcement: “Opening interest only to first-time buyers, while maintaining clear income thresholds of £75,000 sole or £100,000 joint, and keeping the proposition exclusively available via intermediaries, means customers will access the professional advice that is crucial, especially in the initial stages of their home-buying journey.”
