The number of first-time homebuyers borrowing at loan-to-income (LTI) ratios above 4.5 times surged significantly in 2025, reflecting the impact of loosened mortgage lending rules introduced last year. Data obtained through a Freedom of Information request submitted to the Financial Conduct Authority by financial app Plum shows the volume of these high-ratio mortgages increased by 66 percent compared with 2024, reaching 45,800 loans.

This rise follows the Bank of England’s Financial Policy Committee easing restrictions on high-LTI lending in July 2025. Previously, in 2014, the committee limited lenders so that no more than 15 percent of new mortgages could be issued at or above 4.5 times a borrower’s income, a measure aimed at curbing risky lending after the financial crisis. The relaxation allows mortgage providers to offer first-time buyers more products with higher LTI ratios, with some lenders extending loans of up to 6.5 times income.

The number of first-time mortgages with LTI ratios exceeding 5.5 grew tenfold to 4,628 last year, including loans taken by both single and joint borrowers. Coventry Building Society recently began offering mortgages at 6.5 times income to eligible first-time buyers earning at least £30,000 annually, though self-employed applicants are excluded.

Industry specialists interpret the trend with cautious optimism. David Hollingworth, director at brokerage L&C Mortgages, described the increase as a sharp but positive development that indicates first-time buyers are responding to the greater availability of higher LTI products. Meanwhile, Aaron Strutt, product director at Trinity Financial, noted that although borrowing at 6.5 times salary may not appeal to all buyers, some are willing to take on this level of debt to secure a foothold on the property ladder, reducing their reliance on family financial support.

Some lenders, such as Nationwide, have long offered high-ratio loans. Its Helping Hand mortgage product allows borrowing up to six times income and recorded a 57 percent increase in first-time buyers borrowing five times income or more in 2025. Loans above 5.5 times income also increased significantly.

While the changes have enabled more aspiring buyers to enter the market, experts caution about the risks of overextending financially. Plum advised prospective homeowners to consider supplementary saving options, such as the Lifetime ISA, which provides a 25 percent government bonus on savings up to £4,000 each year for house purchases. However, the scheme’s property price cap of £450,000, unchanged since its launch in 2017, remains a limiting factor for buyers in higher-cost areas like London and the southeast.

Personal finance expert Rajan Lakhani of Plum emphasized the benefits of saving a larger deposit, noting that buyers with more substantial deposits often see payments qualify faster and gain access to lower mortgage interest rates. For example, a 20 percent deposit on an average first-time buyer property could reduce monthly mortgage payments by approximately £124 compared to a 10 percent deposit, assuming a 5.06 percent interest rate over 30 years.