HSBC has announced it will allow its UK Premier customers to access mortgages up to 6.5 times their annual income, provided the loan is 90% or less of the property’s value.
The move is aimed at helping high-earning homeowners secure finance to buy property, as typical lenders usually cap borrowing at 4.5 times income.
Eligibility is limited to HSBC Premier account holders, a status available to individuals earning more than £100,000 a year.
Aaron Strutt, from mortgage broker Trinity Financial, said: “I am pretty sure this change will get HSBC a lot more business – especially as many applicants only need slightly more generous loan sizes to buy the properties they want,” he says.
“Affordability is clearly a huge issue in the mortgage and property markets. HSBC is trying to address this – mainly for higher earners at the moment.”
Knight Frank Finance’s managing partner, Simon Gammon, added: “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.”
Read the orginal article: https://propertyindustryeye.com/hsbc-now-lending-6-5x-income-for-mortgage-for-those-who-qualify/
