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Accord are Simplifying LTI caps

12 June 2017


From today, Monday 12 June,  Accord are making Loan to income ratio (LTI) changes: 

  • They’re increasing the LTI cap for loans greater than £500,000 from 4x to 5x
  • Their LTI cap will be 5x income for household incomes of  £70,000 and over
  • Their LTI cap will be 4.49x income for household incomes less than £70,000 

What this means for your customers 

The good news is that this means they’ll be able to meet the lending needs of a larger number of customers, particularly those looking to borrow more than £500,000. 

To simplify their LTI ratios, their overall cap is reduced from 5.49x to 5x, meaning that they now have a maximum LTI of 5x for all applicants with a household income of £70,000 upwards.  As a responsible lender, LTI caps are used together with their affordability calculator and they’re updating this with new market data too. 

For some customers, depending on their circumstances this could mean they will lend less. This is more likely to apply to customers with a household income of £80,000 to £100,000. To help you meet the needs of your customers you’re working with at the moment, they’ll honour AIPs submitted up to 8pm on Sunday 11 June under their current affordability calculations for 30 days (as long as there are no material changes),  but you will need to check their affordability calculator from today before you submit an AIP so you can see for yourself what this means for your customers.

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