HSBC UK Enhances Residential Lending Policy: New Income Multiples for First-Time Buyers and Improved Interest-Only Terms

HSBC UK’s Latest Residential Lending Updates

HSBC UK has announced significant enhancements to their residential lending policy, effective from 1st September. These updates are particularly beneficial for first-time buyers and home movers, bringing more flexibility in income calculations and interest-only borrowing options. Whether you’re stepping onto the property ladder or considering remortgaging, understanding how these changes affect you can help you secure the most suitable mortgage deal.

New Loan to Income (LTI) Multiples for First-Time Buyers

In a move to support first-time buyers (FTBs), HSBC has introduced more generous Loan to Income (LTI) multiples. This change allows eligible buyers to borrow more in relation to their income, making home ownership more accessible.

• Eligibility for enhanced LTI multiples includes:
  • Sole FTB applicants with a minimum income of £35,000
  • Joint FTB applicants with a combined minimum income of £55,000
• Qualified FTBs can now access up to 5.50 × income with an LTV (Loan to Value) of 90% or less

This change allows eligible first-time buyers to borrow more compared to previous limits, giving them a better chance of securing their desired home in the current property market.

Improved LTI Multiples for Non-First-Time Buyers

HSBC is also increasing the maximum income multiple for non-first-time buyers with incomes between £45,000 and £99,999 to 5.00 × income (previously 4.75), provided the LTV is 85% or less. This expansion makes higher-value borrowing more accessible for home movers and those looking to remortgage.

• For incomes of £100,000 and above, the LTI remains at 5.50 × income
• Applicants with an LTV above 90% (up to 95%) remain capped at a 4.49 × income multiple
• Buyers below the minimum income thresholds can still access lending, but at more standard LTI limits (see full table summary below)

LTI Table Summary

• Up to 90% LTV and meeting minimum income: FTBs eligible for up to 5.50 × income
• £45,000–£99,999 income (non-FTB), ≤85% LTV: Up to 5.00 × income
• Above £100,000 income, all applicants: Up to 5.50 × income
• 95% LTV (all applicants): Up to 4.49 × income

Interest-Only Lending Policy Enhancements

HSBC has made their interest-only mortgage policy more accommodating, benefiting those seeking greater flexibility in how they structure their repayments:

• Maximum term for “Part & Part” mortgages: Capital Repayment element can now run up to 40 years (Interest-Only element remains capped at 25 years)
• Maximum age for “Part & Part” applications: Capital Repayment element can continue until the applicant’s 80th birthday
• Any Interest-Only portion must conclude by the oldest applicant’s 70th birthday, or earlier retirement age if applicable
• All affordability assessments for Interest-Only: Now calculated on a Capital Repayment basis, providing clarity for borrowers and brokers

Who Benefits from HSBC UK’s Policy Changes?

• First-Time Buyers: Those with sufficient income can now borrow more, helping overcome affordability constraints
• Home movers and remortgagers: Higher LTI multiples allow more borrowing for those with mid to higher incomes
• Borrowers needing flexible terms: Extending “Part & Part” terms and increasing maximum ages supports longer-term homeownership and retirement planning

Why Choose HSBC UK for Your Next Mortgage?

• Competitive income multiples for a range of buyers
• Greater flexibility with Interest-Only and “Part & Part” mortgages
• National lender status with trusted service
• Transparent daily service level updates for brokers and applicants

Conclusion—Find Out What You Could Borrow

HSBC UK’s latest policy changes make it easier for first-time buyers, home movers, and those seeking flexible repayment options to borrow more responsibly. If you’re considering a mortgage or remortgage, now is an excellent time to review your options and see if you qualify for HSBC’s enhanced lending criteria.

Contact our expert mortgage brokers for tailored advice and to explore how these improvements can help you achieve your property goals.

FAQs

• Who qualifies for HSBC’s new LTI multiples?
  First-time buyers with a minimum sole income of £35,000 or joint income of £55,000, and home movers/remortgagers meeting set income and LTV criteria.
• How do these changes affect my maximum borrowing?
  Eligible applicants may now borrow a higher multiple of their income, potentially increasing their maximum loan compared to previous policy.
• Can I get an Interest-Only mortgage for longer?
  Yes, the Capital Repayment element of “Part & Part” can last up to 40 years (Interest-Only max 25 years), with eligibility up to age 80.
• What is required for an HSBC Interest-Only mortgage?
  The Interest-Only part must end by your 70th birthday or retirement (if sooner) and affordability is based on a Capital Repayment assessment.
• How do I find out if I qualify?
  Contact our broker team for free, personalised advice and to check your eligibility against the latest HSBC lending criteria.