Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Accord lowers LTI cap for higher incomes

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The new cap takes effect from 21 October and will impact new applications for additional loans

Accord Mortgages has cut its maximum loan to income (LTI) multiple down to 4.49 for incomes of £60,000 and above to manage service levels.

New business applications where incomes are £60,000 or more will no longer be calculated at x5 income as before, but x4.49, in line with applications where income is below the £60,000 threshold.

The lender, and its parent, the Yorkshire Building Society, will lower the cap on Wednesday 21 October.

It said the move was being made in order to maintain service levels and allow the intermediary lender to retain the broadest range of products possible.

The cap was previously five times income and the change puts higher earners on the same level as those earning below £60,000.

The new cap takes effect from Wednesday 21 October and will only impact new business and new applications for additional loans.

Accord highlighted that pipeline cases will not be affected, even if there is a material change to the application.

Jeremy Duncombe, director of intermediary distribution at Accord Mortgages said: Our priority is ensuring we can continue to offer a high level of support to brokers within the current environment. By making this adjustment to LTIs, we can manage volume and increase capacity to support brokers with a wider range of products.

While a difficult decision to make, by honouring all our pipeline cases we hope the impact to brokers and customers will be limited. We will continue to review the situation and reinstate the higher cap as soon as possible, Duncombe said.

Yorkshire Building Society is also standardising its lending policy to an LTI cap of 4.49 times for all incomes.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.



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