Money News
Abbey has announced that it's increasing the amount it will typically lend borrowers to up to 5 times income from 4.5 times income.
The move, aimed at first-time buyers, comes with the proviso that individuals or couples put down a minimum 25% deposit and have an income in excess of £50,000.
The bank makes the point that it will look at individual borrowers' credit scores and ability to repay the loan when deciding how much it will lend, however.
Abbey's mortgage lending criteria haven't changed substantially since the early 1990 when interest rates peaked at 15% and affordability issues were significant. However, the bank says it's now sensible to review income multiples in light of the current climate of low interest rates and higher house prices. Other major lenders may start doing similar reviews if they haven't already.
01 November 2006 © Moneyextra.com
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