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Daily Mail
17-07-2025
- Business
- Daily Mail
Lloyds to hand bigger mortgages to thousands of first-time buyers
Lloyds Banking Group will allow more first-time buyers to take out bigger mortgages, after the Government and Bank of England loosened lending rules. The group said it had set aside an extra £4billion to lend to first-time buyers borrowing between 4.5 and 5.5 times their salary. Based on a £250,000 mortgage, the extra cash could help 16,000 first-time buyers. This is an expansion of its First Time Buyer Boost scheme, which is available through Lloyds Bank and Halifax. It enables first-time buyers to borrow up to 5.5 times their annual income when taking a mortgage, rather than the usual 4.5 multiple. The announcement comes following new plans revealed on Tuesday by Rachel Reeves, along with the Bank of England and financial watchdogs, clearing the path for more homeowners to borrow up to six times their income. Lloyds says that upping the income multiples to 5.5x increases the available borrowing by 22 per cent for first-time buyers. Someone earning the average full-time wage of £37,430 might previously be limited to a loan of £168,435 at 4.5 times salary, but at 5.5 times income they could borrow £205,865. A couple both earning the average full-time wage might previously have been limited to a £336,870 mortgage at 4.5 times salary, but at 5.5 times income they could borrow £411,730. A higher-earning family with a combined income of £100,000 could see their borrowing raised from £450,000 to £550,000. Since launching the scheme in August 2024, Lloyds says it has already helped 11,000 First-time buyers get on the ladder by borrowing more than 4.5 times their income. On Wednesday Nationwide Building Society was the first major lender to react by widening access to its 'Helping Hand' mortgage, which allows some first-time buyers to borrow up to six times their income with deposits as low as 5 per cent. Eligible first-time buyers can apply for a Nationwide mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary, down from £55,000. While Nationwide said its move could enable 10,000 more to get on the property ladder, there may be even more people supported through Lloyds Banking Group's latest £4billion injection. Andrew Asaam, homes director at Lloyds Banking Group, said: 'Buying your first home can be challenging, but First Time Buyer Boost helps by making your income go further. 'Recent affordability changes have already started to help would-be homeowners get on the property ladder sooner and lending an extra £4billion means we can help even more customers get the keys to their first home.' How to qualify for First Time Buyer Boost To qualify for the First Time Buyer Boost an eligible first-time buyer must apply for a first-time buyer mortgage with Halifax or Lloyds Bank. They must have a total employed household income of £50,000 or more. This means a couple both earning £25,000 each could be eligible. Lloyds Bank and Halifax will also not offer one of these mortgages unless buyers have at least a 10 per cent deposit. How to find a new mortgage Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible. Buy-to-let landlords should also act as soon as they can. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you What if I need to remortgage? Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it. Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees. Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power. What about buy-to-let landlords Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. How to compare mortgage costs The best way to compare mortgage costs and find the right deal for you is to speak to a broker. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice. Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs. If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you. > Find your best mortgage deal with This is Money and L&C Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
Yahoo
15-07-2025
- Business
- Yahoo
First-time buyers on £30k salary now able to apply for mortgage
First-time buyers will be able to apply for a mortgage with just a £30,000 salary with Nationwide (NBS.L) as the government and Bank of England (BoE) push for more relaxed lending rules. The changes comes as chancellor Rachel Reeves is set to reveal the "biggest set of reforms to financial regulation in a decade" at a summit of finance executives in Leeds this Tuesday, as part of the government's mission to kick start economic growth and support more first-time buyers. Under the plans, more mortgages will be available at over 4.5 times a buyer's income following Bank of England recommendations that some banks and building societies offer more high loan-to-income mortgages — creating up to 36,000 additional mortgages for first-time buyers over the first year. This change means that Nationwide will be able to make its "Helping Hand" mortgage available to people with lower incomes. From Wednesday, eligible first-time buyers can apply for the mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary — down from £55,000. This will support an additional 10,000 first-time buyers each year. Read more: Major lenders offer better sub-4% mortgages amid mini price war This comes alongside the creation of a permanent mortgage guarantee scheme, ensuring high loan-to-value mortgages continue to be available, as well as a review of Financial Conduct Authority (FCA) lending rules that could allow a prospective buyers' record of paying rent on time to show they can afford mortgage repayments. Reeves is expected to say later today: "I welcome the recent changes the Financial Policy Committee has announced to the loan-to-income limit on mortgage lending, which the PRA (Prudential Regulation Authority) and FCA are implementing immediately. 'With an instant impact for consumers, such as Nationwide offering its 'Helping Hand' mortgage to more first time-buyers — supporting an additional 10,000 each year." Other measures are set to be announced to improve the competitiveness of the UK financial sector under the Leeds Reforms, addressing long-standing industry complaints. Read more: 3.5 million on track to pay higher mortgages by 2028 According to the Treasury, the changes will see Britain become the top destination for finance firms over the next decade, attracting inward investment from across the globe to create good, skilled jobs around the country. Reeves is expected to say: 'This is the foundation of an economy, and a country, that is more active and more confident. 'Where people and businesses look to the future and talk about hope about opportunity. Assured of their own capability, and of the ability of our country to boldly face the challenges that lie ahead. 'And certain of the prize if they succeed. Of higher wages and higher living standards. The renewal of Britain in every home and every high street. 'To put it simply: a Britain that is better off." The reforms will be unveiled in Leeds ahead of the chancellor's Mansion House speech this Tuesday evening. Read more: How school fees can affect your mortgage borrowing The pros and cons of getting a mortgage into your 70s How to choose where to live as you get olderSign in to access your portfolio
