NatWest Introduces Six Times Income Mortgages for Higher Earners
In a significant development for the UK mortgage market, NatWest has become the latest major lender to offer mortgages of up to six times a borrower's annual income. This move, described by industry experts as both a positive step and a potential cause for caution, could enable eligible customers to borrow an additional £37,500 or more.
Enhanced Borrowing Limits for Higher Income Brackets
The new lending criteria apply to individuals earning at least £75,000 per year or couples with a combined income of £100,000. For a mortgage with a Loan to Value (LTV) ratio of 75% or lower, these borrowers can now access up to six times their income. This represents a notable increase from the traditional caps of 4.5 or 5.5 times income that have been standard across the industry.
"The addition of NatWest into the 6x income arena is a positive move, matching other High Street lenders in their quest to lend more to the right profile of clients," said Justin Moy, managing director at Chelmsford-based EHF Mortgages. "Those with higher disposable incomes will benefit, while lenders will still need to demonstrate overall affordability at these elevated borrowing levels."
Expert Analysis: Flexibility Versus Risk
Industry professionals have welcomed the increased flexibility but emphasised that this is not a return to the risky lending practices seen before the 2008 financial crisis. Babek Ismayil, CEO at homebuying platform OneDome, noted that the change reflects "how stretched affordability has become rather than a return to looser lending." He highlighted that in high-cost areas, particularly across the South East, borrowers with solid incomes and good credit histories have often been constrained by previous caps.
Omer Mehmet, managing director at Trinity Finance, added: "For borrowers with strong incomes and solid deposits, this added flexibility could be the difference between moving or staying put. Crucially, robust affordability checks remain in place, keeping this a measured step rather than a return to riskier lending."
Cautions and Market Implications
Despite the potential benefits, several experts have issued warnings. Richard Davidson, a mortgage advisor, expressed concern that higher income multiples "could become a gateway to riskier lending after years of caution and restraint since 2008." He pointed out that in regions with severe housing shortages, such as the south east, these multiples may become a necessity for homeownership.
Dariusz Karpowicz, director at Albion Financial Advice, framed the key question: "Are we addressing affordability issues or simply enabling people to stretch themselves further in an overheated market?" He acknowledged that while the move offers relief, it also means borrowers commit larger portions of their income to mortgage payments.
Context and Lender Strategy
NatWest's announcement follows similar initiatives by Barclays and Nationwide in recent months, indicating a broader trend among major lenders. Elliott Culley, director at Switch Mortgage Finance, observed that NatWest is currently "dipping their toe in the water" with specific conditions, including a minimum 25% deposit requirement and higher salary thresholds than some competitors.
Samuel Mather-Holgate, managing director at Mather and Murray Financial, interpreted the move as a sign of "lenders' appetite for risk returning," which he views as "good news for homeowners." With interest rates falling, stretching income ratios has become more feasible, potentially aiding home movers and those looking to refinance.
The overall consensus suggests that while NatWest's update provides valuable extra borrowing power for higher earners, it remains a targeted offering within a framework of stringent affordability assessments. The long-term impact on the housing market and borrower sustainability will be closely watched by both industry insiders and prospective homeowners.
