Natwest Enhances Maximum Loan To Income

High street lenders are now competing hard in the large loan arena, and NatWest moving its joint LTI to 6.5x at 75% LTV is another positive step. For too long, high earning professionals have been pushed towards private banks and specialist lenders by default. The larger high street names have built strong large loan divisions of their own. High earners are good quality, low LTV borrowers, and lifting the income multiples is the simplest way for a lender to grow its book. Updates like this are music to my ears.

NatWest’s move is exactly the kind of modern lending criteria the market needs. Britain’s housing market has changed, incomes have changed and property prices have changed, so lenders have to evolve too. This is not reckless lending. Mortgage underwriting is more forensic than ever, with detailed checks on income, commitments, credit conduct and real affordability. Where the case stacks up, borrowers should not be held back by outdated income caps. This is a welcome step and should help get parts of Britain moving again.

Higher income multiples will undoubtedly help some buyers in places like London, where property prices have long since detached themselves from reality. For some borrowers, 6.5x income could be the difference between buying a family home or remaining in a one-bed flat indefinitely.
But there’s a wider question around whether giving people bigger and bigger loans is actually solving the affordability problem or just putting a very expensive plaster over it!
A 6.5x mortgage might look fine on paper, but it still has to be repaid in the real world, where childcare costs resemble a second mortgage and service charges seem to rise with the enthusiasm of cryptocurrency during a bull market.
There’s also a risk of creating a two-tier housing market, where higher earners are handed ever-larger borrowing power while average first-time buyers are left watching from the sidelines.

This is a significant move, and alongside Lloyds and Santander looking at smaller deposits, it's a welcome boost for the mortgage industry. Many first time buyers have strong affordability and are young enough to take a long term view. With rentals feeling increasingly insecure and expensive, any help from a mainstream bank willing to offer what some specialist lenders have been doing for years will be warmly received. It's certainly a shot in the arm for the housing market.

Natwest's further increase to maximum borrowing potential will certainly help some borrowers, but with the 25% deposit requirement and 150k minimum income to obtain it, this will not have any seismic impact beyond high earners in London. However, it would not be surprising if these criteria were reduced or eased over the coming months, or by competing lenders looking to do similar. The key for the borrowers will be to consider that just because the bank will lend you the money, are you comfortable you can afford the repayments over the long term.

This will definitely help some high-earning couples finally get on or move up the ladder, especially with house prices still miles ahead of salaries. But giving people the ability to borrow more isn’t the same as making homes more affordable. It might get the market moving a bit again, but unless more houses are actually built, prices will just keep climbing.

This is an unexpected move from NatWest that makes their proposition more appealing to higher earners looking for larger mortgage loans especially as the bank often has best buy mortgage rates.
NatWest is clearly targeting the higher earners keen to secure bigger mortgages and they can offer larger income multiples now that the lenders are under less pressure from the financial regulators to hold off issuing more generous mortgages.
This policy change means NatWest are more generous than virtually all of the other banks and building societies. That said, HSBC made a similar change last year but borrowers needed to earn over £100,000 to access the increased 6.5 times salary multiple. This income stretch mortgage is large and borrowers will really need to think carefully before they take such a big income multiple even if they earn £150,000.

The headline is the income multiple, but the real constraint is the 75% loan-to-value cap, which still requires a 25% deposit. The high street large loan market already clusters at 70-80% LTV for loans between £750,000 and above £1m. Pushing income multiples upward without loosening the LTV ceiling is moving one lever while the other stays bolted down.
The timing makes that gap sharper. Asset-rich, cash-poor homeowners are exiting and downsizing right now, and higher-value homes are carrying some of the biggest discounts in the market. A higher LTV cap alongside the new income multiple would have unlocked considerably more transactions where the softness actually is. As it stands, this is a competitive move for a narrow cohort, not a market mover.