Coventry - Up to 6.5x LTI for eligible first time buyers
We’ve enhanced our lending criteria to support first time buyersWe’ve recently made a number of changes designed to help more first time buyers get onto the property ladder. |
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This isn't something I expected Coventry to start offering, but it shows how keen lenders are to attract more first-time buyers and make it easier to get a sufficiently large mortgage to buy the property they want. More of the banks and building societies are offering 5.5 and six times single and joint income mortgages, but most are not stretching to 6.5 times salary.
Nationwide’s six times salary Helping Hand scheme has been incredibly popular, and other lenders clearly want their piece of this market. Most first-time buyers will not need to borrow the full 6.5 times salary, but they do need an income boost. HSBC and NatWest were probably the last big lenders to start offering up to 6.5 times salary, but applicants need to earn over £100,000 to qualify through HSBC and £150,000 via NatWest. For many first-time buyers the thought of borrowing up to 6.5 times salary is not that appealing, but they will do it if it means they can get on the property ladder.
Nationwide’s six times salary Helping Hand scheme has been incredibly popular, and other lenders clearly want their piece of this market. Most first-time buyers will not need to borrow the full 6.5 times salary, but they do need an income boost. HSBC and NatWest were probably the last big lenders to start offering up to 6.5 times salary, but applicants need to earn over £100,000 to qualify through HSBC and £150,000 via NatWest. For many first-time buyers the thought of borrowing up to 6.5 times salary is not that appealing, but they will do it if it means they can get on the property ladder.
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Coventry increasing its maximum loan-to-income to 6.5 times for eligible first-time buyers is another reminder of just how much borrowing capacity can vary between lenders. Two buyers with exactly the same income, deposit and circumstances can potentially be offered very different amounts depending on which lender assesses them.
That makes comparing the market important before starting a property search. A buyer who assumes they can only borrow what one lender or an online calculator suggests could unnecessarily lower their budget or conclude they can't buy at all. Higher income multiples won't suit everyone and affordability checks still apply, but having more options could make a significant difference for some first-time buyers.
That makes comparing the market important before starting a property search. A buyer who assumes they can only borrow what one lender or an online calculator suggests could unnecessarily lower their budget or conclude they can't buy at all. Higher income multiples won't suit everyone and affordability checks still apply, but having more options could make a significant difference for some first-time buyers.
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This should set alarm bells ringing. Helping first-time buyers is laudable, but stretching loans to 6.5 times income risks turning aspiration into financial overreach. At today’s prices, many buyers are already walking a tightrope between deposits, bills and mortgage repayments. Larger loans and high loan-to-value deals may open the door, but they can also leave households dangerously exposed if rates stay higher, wages stall or property prices dip. This sort of lending should be reserved for genuinely exceptional cases with rock-solid affordability, not treated as a new normal. Getting on the ladder is not a victory if the first rung snaps beneath you.
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6.5 times income for first time buyers is a meaningful move from Coventry and a sign of just how competitive this end of the market has become. Nationwide's Helping Hand scheme showed there was real appetite for higher income multiples and other lenders have been playing catch up ever since.
The income thresholds here are worth noting though. You need to earn at least £30,000 as a sole applicant or £50,000 combined, and no self-employed applicants are eligible. So it will not help everyone, but for the right client it could make a genuine difference between buying and not buying.
The broader point is one I make to clients regularly. What one lender will offer you and what another will offer you can be very different on identical circumstances. An online calculator or a single lender check does not give you the full picture. That is exactly where a broker earns their place.
The income thresholds here are worth noting though. You need to earn at least £30,000 as a sole applicant or £50,000 combined, and no self-employed applicants are eligible. So it will not help everyone, but for the right client it could make a genuine difference between buying and not buying.
The broader point is one I make to clients regularly. What one lender will offer you and what another will offer you can be very different on identical circumstances. An online calculator or a single lender check does not give you the full picture. That is exactly where a broker earns their place.