Loan-to-Income (LTI) Explained

Loan-to-Income (LTI) Explained: What First-Time Buyers Need to Know

Understanding how lenders assess your client’s ability to borrow is one of the most important parts of advising first-time buyers.

One key measure in the mortgages is Loan-to-Income (LTI) — and in recent years some lenders have introduced ways to stretch typical income multiples, helping more borrowers access suitable mortgages.

This guide explains what LTI is, how it works for first-time buyers, and how products with enhanced income multiples fit in affordability considerations.

What Does Loan-to-Income (LTI) Mean?

Loan-to-Income (LTI) is a ratio that compares the amount someone wants to borrow to their gross annual income:

LTI = Mortgage loan amount ÷ Gross annual income

For example:
If your client wants to borrow £240,000 and their income is £60,000, their LTI would be 4.0.

Lenders use LTI as one factor in assessing affordability alongside detailed checks on income, outgoings and stress-testing for future interest rate increases. Passing an LTI test alone does not mean a mortgage will be approved.

How Do Lenders Typically Use LTI

Most lenders will lend up to around 4.0–4.5 times income under standard criteria.

Higher multiples may be considered on a case-by-case basis if the applicant meets the lender’s full affordability criteria.

Enhanced Income Multiples: What They Are and How They Work

Some lenders have introduced options that allow higher income multiples for eligible applicants.

These do not bypass affordability checks, but they can provide additional flexibility in cases where a client’s circumstances support higher borrowing within lending policy.

Accord’s ‘Boost LTI’ Range

Accord Mortgages offers a range called Boost LTI, designed to allow for increased income multiples for eligible applicants.

    • For first-time buyers, enhanced LTI options up to around 5.5 times income are available up to a 95% loan-to-value (LTV), subject to standard lending policy and criteria. 

    • For home movers and remortgagers, higher multiples are available at LTVs up to 90% with a minimum household income threshold (typically £50,000).

Halifax First Time Buyer Boost

Halifax also provides an enhanced borrowing approach for first-time buyers through its First Time Buyer Boost.

    • Eligible first-time buyers may be considered for borrowing up to 5.5 times income in the affordability assessment (effectively increasing the income multiple used), where the household income and other criteria are met.

Important Points to Be Aware Of

  • Higher LTI options do not guarantee mortgage approval

  • Accord’s availability and criteria may change, and meeting an LTI multiple does not guarantee approval

  • All applications remain subject to affordability checks, credit assessment and lender criteria

  • Enhanced income multiples may result in fewer product options or higher interest rates

  • Lender criteria and product availability can change over time

Borrowing the maximum available is not always appropriate, and suitability will vary depending on individual circumstances.

Sources & Credits

Information referenced in this article has been sourced from publicly available lender materials, including:

Important Things to Understand

1. LTI Is Not a Promise of Lending

An enhanced LTI range or boost does not guarantee a mortgage. It simply reflects a lender’s willingness to consider higher multiples within their criteria and regulatory limits.

2. Affordability Matters Most

Lenders will always assess affordability based on income, commitments, expenses, credit history and a stressed interest rate. Higher LTI allowances do not replace these checks.

3. Market Conditions and Policy Changes

Lender criteria, minimum income requirements and product availability can change over time. It’s important to check current policy and product details directly from lenders or product manuals at the time of application.

Final Thoughts

A mortgage is one of the biggest financial commitments you’ll ever make, so it’s important to understand how it works before you proceed.

Always speak to a qualified mortgage adviser who can assess your personal situation and help you find the most suitable option.

This article is intended for general information only and does not constitute financial advice. Always seek personalised advice from a qualified mortgage adviser before making any financial decisions.

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