NATWEST has announced that it is tweaking its requirements and making it easier for borrowers to access its mortgages up to 6x income with brokers hailing the move as “significant”.
The lender is making further changes to its high loan-to-incomes (LTIs) that means more borrowers are eligible for its mortgages.
Following the lender’s increase in LTIs to 6x for customers with a sole income of £75,000 per year or a joint income of £100,000, NatWest is now removing the high credit score requirement.
NatWest said it will mean more can borrow the amount of money they need to reach their home goals.
Riz Malik, Director at Southend-on-Sea-based R3 Wealth, said this could spark a spike in activity.
He added: “It is apparent that lenders will be leading the charge to get Britain moving. With the prospect of further rate reductions, widening lender criteria as well as lower rates could provide the impetus the market desperately needs.
“If others follow, we could be in for a spike in activity. All we need now is the elusive stamp duty cut.”
NatWest’s move is significant
Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, said NatWest’s move to remove the high credit score requirement is the right thing to do.
She continued: “NatWest’s move is significant because access to credit does help get Britain moving. When lenders responsibly widen criteria, especially for first-time buyers, it increases activity across the whole chain and boosts confidence. Removing the high credit score requirement is sensible.
“A three-digit score doesn’t define someone’s financial discipline. I often see high-earning professionals held back by minor historic blips that don’t reflect their real affordability. Mortgage decisions should assess the full picture: income stability, deposit strength and sustainability, not just a score.
“The market is moving in a better direction than we saw in 2023, and with likely rate cuts this year, confidence should continue improving. Others may follow, depending on lending targets and risk appetite, but competition in the market is strong. If we want a stronger, more fluid housing market, lending decisions must be driven by true affordability and risk assessment, not blunt credit metrics.”
Great sign for the marketplace
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said it is a “great sign” for the housing market.
He added: “NatWest further removing hurdles to borrowers being able to obtain the loan amount they need is a great sign for the marketplace.
“It follows a recent trend of rate reductions and criteria easing as lenders look to grab market share whilst propelling the housing market forward.”
Aaron Strutt, Product and Communications Director at London-based Trinity Financial, said many are unable to get a mortgage due to strict criteria.
He continued: “So many homeowners want to raise additional funds and increase their mortgage to pay for home improvements like extensions or garden makeovers, or to consolidate debt or buy a new car. The issue is that they struggle to meet their lender’s existing customer borrowing rules, which are often different from new customer affordability calculations.
“It is not usual for homeowners to call their lender to ask if they can raise more cash to be told that they can’t technically afford their mortgage at the moment.
“This means they either don’t borrow the money or apply for more expensive unsecured loans or second charges. Or they wait until their fixed or tracker rates expire and switch to lenders with more generous affordability calculations.”
