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NatWest cuts loan-to-income maximums

NatWest Intermediary Solutions has reduced its loan-to-income (LTI) maximums for mortgage applications up to 85% LTV.

It has reduced its maximum LTI from 4.99 to 4.45 times income.

NatWest’s maximums on loans at 85% LTV and above will remain at four times income.

This follows a move by Barclays in August, which reduced the threshold at which its five times income multiple cap applies to £175,000.

Last year, the Bank of England requested powers to force lenders to place limits on residential mortgage lending, including buy-to-let, in respect of loan-to-values (LTVs) and debt-to-income ratios.

Currently the Bank’s Financial Policy Committee (FPC) can make recommendations on LTI ratios, but lacks the power to enforce them.

In June 2014 the FPC recommended that only 15% of new mortgages should have an LTI ratio above 4.5 times income.

A NatWest Intermediary Solutions spokesperson 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 LTI 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 LTI maximums remain at four times income."

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