Homebuyers earning £40,000 could potentially borrow an extra £20,000 following changes to Skipton Building Society’s mortgage affordability rules.
Eligible buyers borrowing up to 90% of a property’s value can now access mortgages worth up to six times their income, increased from 5.5 times.
For a sole applicant meeting Skipton’s £40,000 minimum income requirement, that potentially increases maximum borrowing from £220,000 to £240,000.
With a 10% deposit, £240,000 of borrowing could theoretically support the purchase of a property worth around £266,700, subject to affordability assessments and lending criteria.
BUYER BUDGETS
The change could widen the range of properties available to buyers whose incomes support their mortgage repayments but who are constrained by traditional income multiples.
Skipton is also increasing its maximum multiple at 95% loan-to-value from five to 5.5 times income.
Minimum incomes remain £40,000 for sole applicants and £60,000 for joint applicants.
The higher limits are available across residential mortgages as well as Shared Ownership, First Homes, Help to Buy and LIFT applications.
AFFORDABILITY BARRIERS
Jen Lloyd (main picture), Head of Mortgage Products at Skipton Building Society, says: “For many aspiring homeowners, affordability isn’t always the challenge. The barrier can be borrowing enough to buy a suitable home in the area where they want to live.
“It’s about creating a fairer path to homeownership by recognising that some borrowers can comfortably afford their mortgage repayments but are restricted by borrowing caps that don’t always reflect their individual situation.”
Skipton says all applications will continue to be subject to its affordability assessment regardless of the income multiple available.
