NatWest has announced today that it has lowered its loan to income maximums for mortgage applications of under 85% LTV from 4.99 to 4.45 times income.
LTI maximums on loans at 85% LTV and above will remain at four times income.
In August, Barclays reduced the threshold at which the 5.00 x income multiple cap applies to £175,000.
Last year, the Bank of England requested powers to require lenders to place limits on residential mortgage lending, including BTL, in respect of LTVs and debt to income ratios.
Currently the FPC can make recommendations on LTI ratios, but does not have the power to enforce them. In June 2014 the FPC recommended that only 15% of new mortgages should have an LTI ratio greater than 4.5.
A spokesperson for NatWest Intermediary Solutions said: “Following a recent review of our business mix, we have made some adjustments to our loan to income maximums for mortgage applications of under 85% LTV to 4.45 times income. Previously it was 4.99 times income for applications up to 75% LTV and 4.49 times income for applications between 75.01-85% LTV.
We continue to place a strong focus on customer affordability. The loan to income maximum is just one measure we use to assess affordability and the changes have been incorporated into our affordability calculator that is automatically applied to the result a broker will get on screen. For all loans above 85% LTV the loan to income maximums remain at four times income.”