NatWest will now lend up to 6.5 times their income to high earners in the latest affordability boost.
The lender today emailed brokers to say it has increased the maximum loan/income threshold for joint applications earning more than £150,000.
It limits the upper loan-to-value limit to 75% for those borrowing at the maximum LTI of 6.5x.
Trinity Financial product and communications director Aaron Strutt said: “This is an unexpected move from NatWest that makes their proposition more attractive to higher income earners looking for larger mortgage loans, especially as the bank often has the best mortgage rates.
“NatWest is clearly targeting higher income earners who are keen to take out larger mortgages and they can offer greater income multiples now that lenders are under less pressure from financial regulators to wait to provide more generous mortgages.
“NatWest has always been a relatively generous lender, but has gone one step further and become one of the best income providers for higher incomes.
“This policy change means they are more generous than almost all other banks and building societies.
“That said, HSBC made a similar change last year, but borrowers had to earn over £100,000 to access the increased 6.5x salary multiple.
“We know lenders are keen to do business, but this income extension mortgage is a big one and borrowers will really need to think carefully before taking on such a large debt – even if they earn £150,000.
“This change will bring more business to NatWest, especially as many applicants only need slightly more generous loan sizes to buy the properties they want.
“Affordability is clearly a major issue in the mortgage and property markets and NatWest is working to address this, although at the moment mainly for higher incomes.
“Many potential borrowers are still struggling to buy the properties they want.
“Potential buyers will read this policy change and wonder why applicants need to earn so much to get the higher income multiples.
‘But that is not actually necessary, because there is a selection of lenders that offer many starters between five and seven times the salary.
“There are also more mortgages with low deposits.”
Strutt says the Teachers’ Building Society and April mortgages for eligible borrowers will increase by up to seven times wages; HSBC up to 6.5x; National and Barclays up to 6x; while Halifax, TSB and Santander will move to 5.5x.