It removes the interest-only cap for LTI ratios
Virgin Money has announced a change in its loan-to-income (LTI) policy, removing the interest-only cap so that the repayment method no longer features in the lender’s LTIs.
In an email sent to brokers on Thursday, the lender said the move is “good for your customers, because it means more will get the loan amounts they need – and it’s good for you, because it could mean you’re able to help more customers.”
Under the revised policy, for purchases or remortgage with additional borrowing, LTIs will be capped at 4.49 times for income under £50,000, at five times for income from £50,000 to £74,999, and at 5.5 times for income of £75,000 or more.
A maximum 4.49 times LTI is applicable, regardless of income, if the loan-to-value (LTV) is over 85%, if any applicant is self-employed (excluding contractors meeting the lender’s contractor policy), or if it is a shared ownership.
For remortgage with no additional borrowing, LTIs will be capped at 5.5 times for up to 85% LTV, and at 4.49 times for over 85% LTV.
Virgin Money clarified that when customers are remortgaging with no additional borrowing, their income and self-employment status do not impact LTI limits.
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