Virgin Money rolls out 4x LTI cap on large loans


Virgin Money is bringing in a maximum LTI cap of 4x for loans of more than £500,000.

The change was announced in a broker note today.

The note says: “For loans above £500k, we have introduced a maximum loan to income multiple of x4, based on our usual allowable types of income.

“We only expect this to impact a very small proportion of our lending and we continue to offer competitive loan amounts to higher earning customers across the country.”

A Virgin Money spokesman says the note formalises a policy the lender was generally acting on before it sent the note.

The note adds that the lender is also making further changes to the affordability criteria of its lending policy.

The changes apply immediately to Virgin’s affordability calculator and any decisions in principle.

The note says that single applicants will get a “more tailored” approach that considers lower levels of household spending.

Virgin Money will also be more lenient towards borrowers with small amounts of unsecured debt.

The lender will also consider the higher levels of disposable income of clients with incomes above £40,000 when making affordability calculations.

Virgin also says it will help more clients who want high LTV loans by applying a “strong understanding of affordability for customers” in its new lending policy.

Finally, for Help to Buy equity loans Virgin Money will now calculate government fees as part of borrowers’ monthly financial commitments at 3 per cent of the equity loan, compared to 4 per cent previously.

The note adds: “While we continue to carefully assess your client’s ability to repay their mortgage, now and in the future as interest rates rise, the changes we’ve made may enhance the amount we are prepared to lend to your client.

“So whether your clients are looking to buy a property or remortgage, our new affordability calculator should enable more of your high quality cases to fit with Virgin Money.”

A Virgin Money spokesman would not explain the changes further.

He says: “There are certain areas where taking a more tailored approach for applicants is appropriate, rather than applying one set of criteria.

“We are not going down into the specifics of how we are going to apply it.”