In the coming months a new lender called Perenna plans to launch mortgages of up to six times salary, and some experts believe other similar deals will emerge this year. Last year a number of big lenders lifted their caps to 5.5 times salary for certain borrowers. For a solo applicant earning £75,000 whose borrowing was capped at 4.5 times income, they might be able to buy a home for £375,000. The new breed of long-term fixed-rate mortgages avoid these restrictions because their interest rates are guaranteed for the lifetime of the loan. Perenna says: “There are no interest rate stress tests with long-term fixed-rate products, as borrowers are protected from any interest rate rises over the long term and won’t revert on to a lender’s higher SVR.”

Source: The Guardian January 08, 2022 15:20 UTC