Complex lending and the case for flexibility

The UK mortgage market is in a place where affordability, rather than demand, is shaping lending decisions. Recent Moneyfacts data shows lenders are focused firmly on first-time buyers, with product choice at higher LTV levels now at record highs.

The number of 90% LTV deals has risen by 44% over the past two years, while options at 95% LTV are at their strongest level since before the financial crisis, underlining a clear intent from lenders to support access to the market.¹

At the same time, the wider picture on affordability still remains tight. While house prices have eased in some regions, everyday costs continue to take up a significant share of household income.

For many borrowers, particularly those buying for the first time, the challenge is not willingness to borrow but the constraints of standard income multiples. This pressure is also building for existing homeowners, with around 1.8 million fixed-rate borrowers due to refinance this year and further large volumes following in 2027, many of whom will face higher monthly payments. ²

A market under regulatory guidance

Regulators have played a role in easing some of these pressures. The FCA has made clear that its existing rules allow lenders to apply flexibility where this is appropriate for the customer and the mortgage, while the Bank of England has confirmed stress rates on new lending have fallen, giving lenders more headroom to support responsible borrowers.³

This shift is visible in the data. FCA figures show lending at higher income multiples rose sharply in Q3 2025, with the proportion of lending to borrowers with a high loan to income ratio increasing to 44%. While this represented the largest quarterly rise since 2020, it remained comfortably within regulatory limits, suggesting a measured rather than reckless expansion of higher LTI lending.⁴

Why complex lending matters now

This environment strengthens the case for complex lending and a more flexible approach to affordability. Many borrowers today do not fit a narrow income template. Earnings may include bonuses, retained profits or multiple sources while, as we all know, spending can both rise and fall. A rigid approach risks excluding borrowers who are able to sustain a mortgage over the long term.

For first-time buyers, a higher income multiple can be the difference between remaining in the rental sector and securing a first home. For remortgagors, flexibility can help manage the impact of higher rates without forcing a move or defaulting to a product transfer that may not reflect the client’s wider position. In both cases, a careful, manual assessment rather than automatic limits can result in a responsible outcome.

Bespoke lending in practice

Bank of Ireland’s Bespoke range provides a clear example of how this flexibility can work in practice. Of the approvals in principle submitted through the Bespoke route last year, around 85% were seeking an income multiple above five. At the same time, around 20% of Bespoke cases made use of large loan terms, highlighting how higher income multiples and larger loan sizes often sit together within complex cases.⁵

Bespoke applications can combine several discretions within a single case, such as an enhanced income multiple alongside ring-fenced school fees or the use of net profit instead of dividends. Each application is assessed manually, allowing underwriters to review the full financial position rather than rely on a single metric. While this makes outcomes harder to categorise by feature, it enables lending decisions that reflect the borrower’s real circumstances.

At the same time, application to completion rates for Bespoke cases remain broadly in line with standard lending, indicating a more individual approach does not lead to weaker outcomes.

A responsible use of higher income multiples

Bespoke lending can extend up to six times income, but this is not about stretching affordability for its own sake. In many cases, the higher multiple provides a modest uplift that allows the case to work without relying on the maximum available. As always, it’s important to establish an early dialogue between broker and lender to test different financing structures before settling on the right solution.

As affordability remains the defining issue for the market, lenders that can apply judgement and context will be better placed to support brokers and their clients. Complex lending is no longer peripheral. It is becoming a core part of responsible lending in a market where borrower needs are increasingly varied.

Notes

1. Moneyfacts first-time buyer research and product data, February 2026
   Analysis showing a 44 per cent rise in 90 per cent LTV products over two years, with 981 deals now available, and record choice at 95 per cent LTV.
   Source: Mortgage Solutions, Moneyfacts
   https://www.mortgagesolutions.co.uk/news/2026/02/10/first-time-buyer-mortgage-volumes-reach-highest-level-on-record/
2. Remortgaging outlook and fixed rate maturities
   Forecasts showing around 1.8 million borrowers due to refinance in 2026, with remortgage volumes expected to rise further.
   Source: Intermediary Mortgage Lenders Association, January 2026
   https://theintermediary.co.uk/2026/01/remortgaging-set-to-regain-ground-as-affordability-improves-finds-imla/
3. Regulatory guidance on affordability and stress testing
   FCA confirmation that existing rules allow flexibility, alongside evidence of falling stress rates on new lending.
   Sources:
   FCA Mortgage Rule Review feedback, March 2025
   https://www.fca.org.uk/publication/feedback/fs25-6.pdf
   Bank of England Financial Stability Report, December 2025
   https://www.bankofengland.co.uk/financial-stability-report/2025/december-2025
4. Mortgage lending statistics Q3 2025
   Data showing lending to borrowers with high loan to income ratios increased to 44.7 per cent in Q3 2025.
   Source: Financial Conduct Authority
   https://www.fca.org.uk/data/commentary-mortgage-lending-statistics-q3-2025
5. Bank of Ireland for Intermediaries Bespoke data
   Internal underwriting data showing income multiples above five were sought in around 85 per cent of Bespoke agreements in principle, with around 20 per cent using large loan terms.
   Source: Bank of Ireland for Intermediaries, internal data, 2025

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