Major bank to let first-time buyers borrow up to 5.5 times salary

A major lender has announced it will allow first-time buyers to borrow up to five-and-a-half times their income in a bid to help more people onto the property ladder.

Lloyds says it has increased its max loan-to-income ratio from 4.49 as the situation is “tough right now” for first-time house hunters.

It means buyers with a household income of £50,000 and a 10% deposit may be able to borrow £275,000 – up from £224,500 at the previous rate.

To qualify, borrowers have to apply for a first-time buyer mortgage with Lloyds or sister bank Halifax, have a total household income of at least £50,000 and a minimum 10% deposit, and not be using shared ownership or shared equity schemes. Normal affordability checks also apply.

Andrew Asaam, homes director at Lloyds Banking Group, said: “Getting the keys to a first home is a big deal, but it’s tough right now.

“Aspiring homeowners have been struggling with house prices rising faster than their wages. They need to save for a deposit, keep up with rent, and choose the right mortgage.”

Meanwhile, the National Association of Estate Agents’ Propertymark president Toby Leek said it was “encouraging” to see banks offering more help to first-time buyers.