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Lloyds and RBS ‘do not plan’ to copy Barclays’ LTI cap

Lloyds Banking Group and Royal Bank of Scotland have stated they have no plans to follow Barclays in applying blanket LTI caps.

Last week, Mortgage Strategy revealed Barclays had limited all mortgage applications to 4.5 times income, regardless of salary or the LTV. Previously, the maximum LTI available was determined by a borrower’s salary and the loan’s LTV. The maximum was 5.5 times income.

Last May, Lloyds Banking Group started capping income multiples to four times income for borrowing above £500,000; it says it has no plans to amend this policy.

NatWest Intermediary Solutions followed suit a month later and applied four times income on applications above £500,000, with no LTI cap for loans below that size. It has also confirmed it will not make any further changes to its policy.

Nationwide and Santander say they have no plans to lower their LTI caps to the same level as that of Barclays. Nationwide has a blanket cap of 4.75 times income on residential lending but has no plans to amend this.

Santander is understood to have a limit of five times income on residential applications, depending on affordability calculation results. While it has not confirmed the exact LTI cap, Santander has stated it has no plans to change its income multiple policy.

Chadney Bulgin mortgage partner Jonathan Clark says: “I was surprised when I read about the Barclays change… and I would be very worried if other lenders started to follow suit because that would lead to a market of vanilla products and little room to innovate.”


Doug Hall

60 Seconds with… Doug Hall, director, 3mc

You have recently started a column for Mortgage Strategy on the commercial sector. What are the sector’s prospects in 2015 and what advice would you give brokers looking to it as a new source of income? 2015 looks like it will be a good year for commercial lending, with the economy strengthening and investors showing […]


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