Atom bank has made a raft of criteria changes that will see it lift the loan sizes for prime products, as well as cutting rates on selected offers by up to 25 basis points.
The app-based lender has raised its maximum loan to £1m for 80% and 85% loan-to-value prime products — and up to £750,000 for 90% and 95% LTV prime deals.
It adds that income multiples for self-employed applicants have lifted to 5.5 times from 4.49 times for those with a single income of £75,000, or a joint income of £100,000.
Also, the business has increased allowable variable income to 70% from 50%, for those who have jobs with variable incomes.
The lender says these changes cater for customers who don’t qualify for products attached to the mortgage guarantee scheme, which is capped at a property value of £600,000.
It adds: “The bank hopes the changes to the maximum loan amount will benefit those in London and the southeast in particular, where the Office for National Statistics data shows house prices in the capital stand at around £528,000 on average.”
The business adds that selected prime rates will be reduced by up to 25bps.
Atom bank head of mortgages Richard Harrison says: “Clearly it’s tough for buyers right now, with financial headwinds making it difficult to make the leap from renter to homeowner.
“We think the increased max loan amount can help a lot of first-time buyers, particularly those who won’t qualify for products attached to the mortgage guarantee scheme.
“This will also benefit those customers living in places like London and the southeast, where house prices tend to be higher.
“Affordability for the self-employed and those with variable income can also be a particular challenge in these regions, so we hope the changes we have made for these groups will make getting on the ladder that little bit easier for them.”
