The number of first-time homebuyers taking on higher levels of mortgage debt has risen significantly, according to data compiled by the money app Plum from a Freedom of Information request to the Financial Conduct Authority. In the past year, the number of first-time buyers securing mortgages with a loan-to-income (LTI) ratio of 4.5 times their salary or above increased by 66%, from 27,500 to 45,800.
More notably, there was a tenfold increase in mortgages issued at LTI ratios of 5.5 times salary or higher, growing from 420 to 4,628 within the same period. This trend suggests a shift in the market, where lenders are more frequently offering higher borrowing multiples.
LTI ratio is a key metric used by lenders to determine mortgage affordability, based on a borrower's annual income. Typically, lenders offer up to 4.5 to 5 times a borrower's income. However, a growing number of lenders are now providing mortgages exceeding this threshold, provided borrowers can demonstrate their ability to meet the monthly repayments.
This relaxation of lending criteria is reflected in the offerings of various building societies and mortgage providers. For instance, Coventry Building Society now offers eligible borrowers an LTI ratio of up to 6.5 times their salary, potentially allowing a single applicant earning the average salary to borrow up to £255,190. Other lenders, such as April Mortgages, offer loans up to seven times salary, though these typically require higher deposits.
The Prudential Regulation Authority began reviewing LTI restrictions in July 2025, and while the review is ongoing, the rules have already seen some relaxation. Mortgage providers are no longer required to limit high LTI mortgage products to no more than 15% of their mortgage book. This change has prompted more lenders to offer mortgages at higher LTI ratios, though borrowers still need a good income and credit score to qualify.
This increase in higher LTI mortgages has contributed to an overall rise in first-time buyer loans. According to Financial Conduct Authority data, the total number of first-time buyer loans rose by 16% last year to 380,716, up from 327,001 the previous year.
While these higher borrowing limits may help more individuals get onto the housing ladder, financial experts caution that borrowers could be stretching themselves too thin. Personal finance expert Rajan Lakhani noted that while the changes allow first-time buyers to enter the market more quickly, strategies like saving a deposit through a Lifetime ISA could mitigate the need for excessive debt and reduce exposure to potential interest rate hikes.
Mortgage technical expert Nicholas Mendes added context to the LTI data, emphasizing that the 4,628 loans at 5.5 times income or above represent a small fraction of the over 380,000 first-time buyer mortgages. He stressed that higher income multiples are not inherently irresponsible, as lenders are still obligated to assess individual affordability based on income, career prospects, and outgoings, rather than solely on a fixed multiple of salary. However, Mendes cautioned that borrowers taking on high income multiples with small deposits leave themselves with less financial flexibility, making them more vulnerable to changes in their circumstances, increased costs, or future refinancing at higher rates.