HSBC UK has announced the launch of a 6.5x loan-to-income (LTI) mortgage range for HSBC Premier customers.
Where an application is for 90% LTV or less, HSBC will now apply an LTI of 6.5 x income for customers who hold a HSBC Premier bank account in the UK.
This change in policy increases eligible HSBC Premier customers' borrowing power by more than £200,000 in some instances.
A Premier customer earning £75,000 per year could borrow up to £488,000 under the new policy, compared to up to £375,000 previously.
A Premier customer earning £100,000 per year could borrow up to £650,000, compared to up to £550,000 previously.
On a higher income of £213,000, the borrowing potential rises from £1,171,500 to £1,384,500, an increase of more than £200,000.
All other LTI caps remain the same, with first-time buyers requiring a mortgage up to 90% LTV able to borrow 5.5x their income if they earn £35,000 or above (or a joint income of £55,000 and above).
All other applicants requiring LTVs up to 85% can borrow 4.49x with earnings less than £45,000, 5x between £45,000 and £100,000, and 5.5x at £100,000 or above.
Borrowers requiring LTVs between 85% and 90% LTV can borrow 4.49x income if they're earning less than £75,000, 5x earnings between £75,000 and £100,000, and 5.5x above £100,000.
All other applicants requiring LTVs over 90% can borrow 4.49x their income.
Oli O’Donoghue, head of mortgages at HSBC UK, said: “We’re committed to supporting customers across all segments of the mortgage market. Earlier this year we enhanced loan-to-income ratios for standard borrowers, giving more firepower to people looking to buy a home. Now, by extending that approach to our Premier customers, we’re helping higher earners unlock greater flexibility to move up the property ladder or secure their next home with confidence.
“This increase reflects both our confidence in the financial resilience of our Premier customer base and our commitment to responsible, sustainable lending.”
Simon Gammon, managing partner at Knight Frank Finance, said: “This is the highest income multiple we’ve seen in years. It reflects both a more confident regulatory environment – following the FCA’s recent move to give lenders more flexibility – and HSBC’s clear appetite to grow market share after several years of subdued activity in the property market.
"It’s a positive step that regulators hope will support home ownership and housebuilding, and it poses little threat to financial stability: banks remain constrained in how much lending they can do at these higher multiples. The real question is how much this will translate into demand, given the continued uncertainty around potential tax changes in the upcoming Budget."
