NatWest ‘£150,000’ update for Brits | Personal Finance | Finance
Homebuyers are being met by an enticing new deal from NatWest. Brits with big salaries could now borrow far more from NatWest after the lender unveiled a major shake-up to its mortgage rules aimed at higher earners. The bank has increased its maximum loan-to-income ratio for joint applicants earning more than £150,000, allowing some borrowers to access mortgages worth up to 6.5 times their income. That means a couple earning £150,000 between them could potentially borrow as much as £975,000 – a significant jump on the £750,000 available under a traditional 5x income multiple.
The move marks the fourth time this year that NatWest has relaxed lending criteria as major banks compete fiercely for wealthier borrowers amid signs of a recovery in the housing market.
Mortgage experts said lenders are increasingly stretching affordability rules in an effort to revive housing activity after years of high borrowing costs and sluggish transactions.
Sarah Fox-Clinch, director at Fox Davidson, said: “High street lenders are now competing hard in the large loan arena, and NatWest moving its joint LTI to 6.5x at 75% LTV is another positive step.”
She added: “High earners are good quality, low LTV borrowers, and lifting the income multiples is the simplest way for a lender to grow its book. Updates like this are music to my ears.”
Riz Malik, an independent financial adviser at R3 Wealth, said banks were “trying to pull out all the stops to get Britain moving”.
However, he warned that changes to stamp duty remained a bigger obstacle for the wider market. He said: “Is it enough to get Britain moving? Not with the stamp duty noose around the neck of the UK property market.”
Others cautioned that the new rules would only benefit a relatively small group of affluent borrowers, particularly in London and the South East where property prices remain extremely high. Hannah Vandervennin, director at The Mortgage Consultancy, told Newspage the requirement for a 25% deposit would still prevent many buyers from taking advantage of the higher borrowing limits.
She said: “Pushing income multiples upward without loosening the LTV ceiling is moving one lever while the other stays bolted down.”
Gaurav Shukla, chief executive at Home Me Mortgages, said the changes would help some professionals who are struggling with affordability despite high salaries. But he added: “Affordability is still driven by rates, confidence and whether monthly payments feel comfortable, not just maximum borrowing power.”
Stephen Perkins, managing director at Yellow Brick Mortgages, said the impact would likely be concentrated among high earners in the capital. He said: “This will not have any seismic impact beyond high earners in London.”
Ranald Mitchell, director at Charwin Mortgages, described the change as “exactly the kind of modern lending criteria the market needs”.
He added: “Britain’s housing market has changed, incomes have changed and property prices have changed, so lenders have to evolve, too.”
