HSBC Boosts Lending Limits for Residential Mortgages
HSBC’s move shows that confidence is returning to the market post-election, coming less than a week after making rate reductions, the bank has announced welcome enhancements to its lending criteria. Effective from the 10th of July, HSBC have increased lending limits across their residential range for both purchases and remortgages.
Increased Lending Limits
HSBC has notably raised the lending limits across various loan-to-value (LTV) tiers, providing borrowers with enhanced options to finance their property purchases or remortgages.
For Capital Repayment Mortgages, The new limits are as follows:
- 95% LTV Mortgages: Increased from £500,000 to £570,000.
- 90% LTV Mortgages: Increased from £550,000 to £750,000.
- 85% LTV Mortgages: Increased from £750,000 to £2 million (increased to £1 million for flats).
- 80% LTV Mortgages: Increased from £1 million to £2 million.
- 75% LTV Mortgages: Increased from £2 million to £3 million.
- 70% LTV Mortgages: Increased to lending over £3 million.
For Interest Only Mortgages, the new limits are as follows:
- 25% Deposit Mortgages: Increased from £1 million to £2 million
- 35% Deposit Mortgages: Increased from £2 million to £3 million.
- 50% Deposit Mortgages: Increased to lending over £3 million.
Interest Only Mortgages
To be eligible for a HSBC interest only mortgage, you must meet the following criteria:
- Income: At least one applicant must earn over £75,000 annually.
- Deposit: A minimum deposit of 25% is required.
- Repayment Plan: You must have a credible repayment plan in place. HSBC accepts various options.
How Much Can HSBC Offer You?
The loan amount the lender will agree is very dependent on your salary, whether it’s on a sole basis or jointly with another:
For LTVs of 85% or less:
- Income less than £45,000: Maximum income multiple of 4.49
- Income between £45,000 and £100,000: Maximum income multiple of 4.75
- Income £100,000 and above: Maximum income multiple of 5.50
For LTVs greater than 85%:
- The maximum income multiple is uniformly set at 4.49, regardless of income level.
Implications for Borrowers
Lending criteria changes are a welcome development in the housing market, indicating a shift in lenders' strategies beyond merely lowering rates. The increased lending limits provide more substantial financial support to a wider range of borrowers, from first-time buyers to those looking to purchase their next home.
For many borrowers, these changes could mean the difference between being able to afford their desired property or not. The higher lending limits and LTI ratios reflect HSBC's understanding of the diverse needs of today's homebuyers.
The Importance of Expert Guidance
Given the ever-changing market conditions, seeking the advice of a mortgage consultant is more important than ever. With their expertise, you can navigate these fluctuations effectively and find the best possible mortgage options tailored to your needs.
Our experienced mortgage consultants are ready to assist you with personalised guidance every step of the way. For an initial consultation, speak with our experts or call us at 01628 564631. We're here to help you navigate your mortgage journey with informed advice and care.
Take the first step towards securing your mortgage today.
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage.
Source: HSBC
