New mortgage deal offering 5.5 times earnings for homebuyers 

Lloyds Banking Group has launched 'The First Time Buyer Boost' which allows first-time homebuyers to borrow up to 5.5 times their earnings to fund the purchase of a property. The move is seen as a positive boost for homebuyers struggling to save enough money towards a deposit and meet the affordability criteria set out by many lenders.

The ‘First Time Buyer Boost’ will allow Halifax and Lloyds mortgage customers to qualify for up to 22% more borrowing than was previously possible.

What is the Lloyds First Time Buyer Boost?

All lenders apply thresholds for how much you can borrow based on a maximum multiple of your individual or combined earnings. Lloyds and Halifax have increased this multiple from 4.49 to 5.5 times the combined earnings of first-time buyers earning £50,000 or more. This means that if you have combined household earnings of £50,000, the amount that you can borrow will increase from £224,500 to £275,000.

Who can qualify for Lloyds First Time Buyer Boost?

As with any mortgage offer, there are a number of criteria that have to be met to access Lloyds First Time Buyer Boost and these include:

• Minimum household income of £50,000
• Minimum deposit of 10% of the purchase price
• All applicants must be employed and not self-employed
• At least one applicant must not have owned a property previously

Lloyds has restricted the First Time Buyer Boost to standard first-time buyer mortgages so you cannot make use of it with affordable home ownership schemes including:

• Shared equity scheme
• Shared ownership scheme
• Mortgage guarantee scheme
• The Lend a Hand mortgage

How much can you borrow using Lloyds First Time Buyer Boost?

Total household earnings	Maximum mortgage amount
£50,000	£275,000
£75,000	£412,500
£100,000	£550,000
£125,000	£687,500
£150,000	£825,000

The total amount that you can borrow will also vary depending on other affordability criteria such as your existing credit arrangements and regular outgoings. Every lender must ensure that you can afford the monthly payments associated with your mortgage based on your financial commitments and credit history. Lloyds and Halifax customers are likely to need a very good credit score in order to qualify for the First Time Booster mortgage so it would be a good idea to request a full credit report ahead of applying.

It can also be helpful to share your specific circumstances and requirements with a mortgage professional* who can search the market for the best mortgage solution for you.

What are the alternatives to the First Time Buyer Boost with Lloyds?

There are some other options when it comes to securing a mortgage with a relatively high loan-to-income ratio and we have detailed these in the table below so that you can compare them with Lloyds’ First Time Buyer Boost.

Mortgage lenders that offer a high loan-to-income ratio

Lender	Maximum loan to income	Minimum income	Maximum loan-to-value (LTV)
Lloyds & Halifax	5.5 times	£50,000	90% LTV
Skipton Building Society	5.5 times	£100,000	90% LTV
Nationwide	5.5 times	£100,000	60% LTV
Santander	5.5 times	£100,000	75% LTV
Metro Bank	5.5 times	£100,000	85% LTV
Aldermore	5.5 times	£60,000	90% LTV
Kensington Mortgages	6.0 times	£35,000 single £50,000 joint	90% LTV

Although it is possible to qualify for a larger mortgage with the above lenders, your mortgage application will be tested against several other lending criteria. For example, Kensington Mortgages only offers 6.0 times earnings to specific professionals so you may not qualify even if you meet the minimum income and maximum LTV criteria. You can find more information in our article, "How much can I borrow on my mortgage?".

How to check how much you can borrow based on your earnings

Although your earnings will play a large part in how much you can borrow when applying for a mortgage, there are other factors to be considered. Your other financial commitments, how you earn your income and your credit score will be vital in determining whether you qualify for the mortgage you need. Lenders do not all use the same criteria when assessing your mortgage application and some will be more lenient than others, giving you a better chance of success in securing your mortgage loan.

You can usually find the lending rules for banks and building societies on their websites but not all lenders make this information available to prospective customers and even when they do, it is not always clear or easy to access.

Securing the best interest rate will help you to keep your monthly payments as low as possible and you can check for the best mortgage rates using our mortgage rate comparison tool. You will also find the most recent best mortgage deals updated regularly in our article, "Best mortgage rates in the UK".

Getting help from a mortgage professional can help you find the right solution for your needs without fear of overlooking a mortgage offer that may be better suited to your circumstances. Mortgage brokers search the mortgage market on your behalf - sometimes for a fee, but not always - making the job a lot easier.

If you do not have a mortgage broker then you can source one using the professional online directory Vouchedfor*, where mortgage brokers are listed according to where you live or you can search based on other customers’ reviews. Alternatively, you can contact Habito*, one of the first online mortgage brokers to serve borrowers nationwide without charging a fee. Habito’s mortgage advisers are well-versed in securing the borrowing that you need and can access over 90 lenders’ mortgage deals as part of their search.

 

If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, Vouchedfor, Tembo Money