first direct introduces new Loan-to-Income policy to benefit first-time buyers

29 August 2025

first direct is making a change to its mortgage lending policy that will enable first-time buyers to borrow more, in order to secure their footing on the ladder in a competitive housing market.

 

On Friday, the bank also cut rates across more than 60 two and five year fixed-rate mortgage products from today by up to 0.21 percentage points, with first direct’s range starting at 3.78%.

 

The change to the loan-to-income policy, which means customers can borrow up to 5.5 times their salary, will complement a range of measures already offered by first direct to support first-time buyers, which include maximum terms of up to 40 years and unlimited overpayments.

 

The new policy will mean that someone earning £40,000 with a £24,000 deposit will now be able to borrow up to £220,000 (old policy £190,000), allowing them to purchase a property worth £244,000 subject to affordability. 

 

This additional borrowing could be the difference in enabling someone buying their preferred type or size of first home, or buying a property in their desired location, for school catchment areas or better transport links for commuting to work.

 

 The 5.5x LTI multiple is available to first-time buyers who meet specific criteria including a minimum sole applicant income of £35,000 and a minimum joint applicant income of £55,000.

Liam O’Hara, Head of Mortgages at first direct, said:

“We know that making that first step onto the property ladder can feel more like a leap for some, particularly if you’re trying to purchase a house on a single income. Our change in policy aims to support a broader range of applicants and help more people achieve their dream of owning their home.

 

As always, affordability is at the heart of our decision making and we are absolutely committed to being a responsible lender, so we will continue to assess applications to make sure our customers can manage repayments. Our new policy will give aspiring home owners an extra boost, whilst still ensuring that they are borrowing what they can afford.”

First direct’s full list of mortgage product features designed to benefit customers:

  • Allowing customers to make unlimited overpayments, whenever they choose
  • Maximum term up to 40 years (subject to eligibility), helping reduce monthly payments for customers and for existing customers who wish to extend their term
  • An Agreement in Principle (AIP) for up to six months, giving buyers much-needed time to find their perfect home
  • Current booking fees at a low of £490, with no additional charge for advice from advisors
  • first direct has also introduced differential pricing for different buyer types so that the bank can ensure it offers competitive products tailored to our customers’ specific needs
  • Customers can also transfer their booking fee to another fee paying rate if rates reduce further
  • Free legal fees for re-mortgage applications
  • Access to a competitive savings rate of 7% on its Regular Saver Account, for first direct customers looking to save up to £300 monthly

Note to Editors:

For further information please email Leila.taleb@hsbc.com.

About first direct

first direct provides mobile banking, online and telephone services to its 2 million customers and offers a full range of personal banking products including its multi-award winning current account and mortgages. It’s been recognised as being a pioneer of amazing customer service by numerous independent third parties including The Competition and Markets Authority, Which?, Moneywise, Moneyfacts and Moneysavingexpert.com. As well as its Facebook page, first direct uses social media to engage with customers through LinkedInInstagram, and X.