NatWest has become the latest major high street bank to offer mortgage customers the opportunity to borrow up to six times their annual income, following similar recent moves by competitors Barclays and Nationwide. This significant shift in lending criteria could enable higher earners to access substantially larger mortgage amounts when purchasing property.
Enhanced Borrowing Potential for Higher Earners
The new policy from NatWest means that individuals earning £75,000 per year, or couples with a combined income of £100,000, can now potentially borrow up to six times their income for mortgages with a Loan to Value (LTV) ratio of 75% or lower. This represents a notable increase from traditional lending caps and could translate to borrowers being able to access up to £37,500 more in mortgage funds compared to previous limits.
Industry Experts Weigh In on the Changes
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, commented on the development, stating: "The addition of NatWest into the 6x income arena is a positive move, matching other High Street lenders in their quest to lend more to the right profile of clients. Those with higher disposable incomes will benefit, while lenders will still need to demonstrate overall affordability at these elevated borrowing levels."
Moy emphasised that this does not represent a return to the risky lending practices seen before the 2008 financial crisis, noting: "We are still a million miles away from the days of self-certified income and mortgages without any checking, so this is not a return to 'help-yourself' mortgages."
Addressing Affordability Challenges in High-Cost Areas
Babek Ismayil, CEO at homebuying platform OneDome, provided additional context for the policy shift: "NatWest's move to offer income multiples of up to six times salary reflects how stretched affordability has become rather than a return to looser lending. In many high-cost areas, particularly across the South East, borrowers with solid incomes and good credit histories have increasingly found themselves blocked by traditional 4.5x or 5.5x caps, despite being able to comfortably service higher repayments."
Ismayil highlighted that this change offers greater flexibility to households, particularly when combined with larger deposits and rigorous affordability testing. However, he cautioned that this remains a targeted offering rather than a blanket policy shift across the mortgage market.
Balancing Opportunity with Responsible Lending
Industry experts stress that despite the increased income multiples, lenders continue to implement stringent affordability checks and stress testing. Ismayil noted: "Lenders are still stress-testing carefully and factoring in cost-of-living pressures, so this is far removed from pre-2008 lending practices."
While the higher borrowing limits can help bridge the gap between wages and rising house prices, they also mean borrowers are committing a greater proportion of their income to housing costs. The challenge for the industry will be ensuring this enhanced borrowing power supports sustainable home ownership rather than simply driving property prices higher in already competitive markets.
The moves by NatWest, Barclays and Nationwide represent a significant evolution in mortgage lending criteria, offering new possibilities for higher earners while maintaining what lenders describe as responsible lending practices in today's challenging housing market.
