Mortgage lenders ease rules, offering hope to first-time buyers and movers

Caption: Young couple receiving house key from real estate agent

The UK mortgage market is experiencing a shift, with high street lender HSBC increasing the maximum amount people can borrow on hundreds of its home loans. This change in lending rules is expected to benefit those on higher salaries, as the affordability criteria remain the same.

The new limits mean that some households with 10% deposits, or 90% loan-to-value (LTV), can now borrow up to £750,000, an increase from the previous £550,000. Similarly, those with 15% deposits, or 85% LTV, can borrow up to £1 million, up from £750,000.

Andrew Montlake, managing director of Coreco mortgage brokers, believes this move indicates a larger appetite to lend and confidence in the strength and stability of the housing market.

Meanwhile, graduates with student loans should be aware of a lesser-known payslip code that could impact their ability to secure a mortgage. The code, “CSL Student Loan Ded” or “CSL Ded,” indicates student loan repayments, which can reduce the amount a lender is willing to lend.

Nick, a mortgage expert, explains that student loan repayments can cut into disposable income, making it harder to save for a deposit. However, graduates should remember that going to university often raises their average salary, which can help with mortgage affordability.

In other news, First Direct has reduced its mortgage rates, following other major lenders. The bank has made cuts across a range of fixed repayment mortgages, including two, three, and five-year terms, aimed at both first-time buyers and those moving house.

Liam O’Hara, head of mortgages at First Direct, said: “We’re pleased to be reducing our rates across our range of two, three and five-year fixed mortgages, across LTVs from 60% to 95%. We see the highest demand for those products and today’s changes will help people making their first steps on the ladder, or those moving into their next home.”

The reduction in mortgage rates comes as economists predict a potential cut in the Bank of England base rate from its 16-year peak of 5.25% at the upcoming August vote.

Caption: First Direct reduced mortgage rates by up to 0.17 percentage points on Tuesday

As the mortgage market continues to evolve, it’s essential for first-time buyers and movers to stay informed about the changes and how they can benefit.

What does this mean for first-time buyers and movers?

• HSBC’s increased borrowing limits could make it easier for those on higher salaries to secure a mortgage
• Graduates should be aware of the impact of student loan repayments on their mortgage eligibility
• Reduced mortgage rates from lenders like First Direct could make it more affordable for first-time buyers and movers to get on the property ladder

How can you stay ahead in the mortgage game?

• Keep an eye on changes in mortgage rates and lending rules
• Consider seeking advice from a mortgage expert
• Start saving for a deposit as early as possible

Caption: House prices are expected to continue rising

In the current housing market, it’s more important than ever to stay informed and plan ahead. Will you be taking advantage of the changes in the mortgage market?