Call to increase income multiples

Economist John Wriglesworth has called on lenders to increase the income multiples they offer customers.

Many lenders offer 3x income but Wriglesworth says in a period of strong employment and economic growth, the risk of offering 6x is minimal.

Wriglesworth says the time has come for lenders to relax their criteria on fixed rates.

He says: “While some lenders are happy to offer higher income multiples on variable rates, many seem reluctant to transfer this to fixed rates.”

“It seems bizarre that while home- owners are keen to take out fire and insurance cover, they don’t protect themselves against a far more likely evil – that of interest rates rising.”