Lender Spotlight: Hodge Bank Scraps Loan-to-Income Caps for £40k+ Earners

Most mortgage stories this year have been about rates — who's cutting, who's holding, who's £5 cheaper a month than the lender next door. But one of the more interesting changes recently wasn't about price at all. It was about how much some lenders are now willing to let you borrow in the first place.

What's Changed

Hodge Bank has removed its loan-to-income caps for residential applicants earning £40,000 or more a year, whether that's a single income or a joint application. Previously, like most lenders, Hodge applied tiered income multiple limits linked to how much deposit you were putting down. That link has now been scrapped for this income bracket.

It's part of a wider pattern. Several major lenders have raised their maximum income multiples over the past year, partly in response to the Bank of England easing its loan-to-income flow cap and the FCA encouraging lenders to use more flexibility in their stress testing. The old high-street default of "4.5 times your salary" is increasingly just that — a default, not a ceiling. Some lenders now go up to 5.5 times as standard, with 6 to 6.5 times available to specific borrower profiles.

Why This Actually Matters

For a couple earning a combined £70,000, the difference between a 4.5x and a 5.5x multiple is over £70,000 of extra borrowing power — often the gap between a flat that works and a house that doesn't quite. If you were told "no" or offered less than you expected a year or two ago, it may genuinely be worth asking again, particularly if your income sits comfortably above the £40,000 threshold these kinds of changes tend to target.

It's worth being clear that this isn't lenders throwing caution to the wind. Affordability stress testing and responsible lending checks still apply in full — what's changing is the ceiling on the multiple itself, not the underlying checks on whether you can actually afford the repayments.

Why Lenders Differ So Much

This is also a good reminder of just how fragmented UK lending criteria have become. The same applicant, with the same income, deposit and property, can be offered meaningfully different amounts by different lenders on the very same day. Headline income multiples change from lender to lender and can shift again within months as institutions adjust their risk appetite. That's exactly the kind of detail that's easy to miss if you only ever check your own bank's website.

The Takeaway

If your borrowing amount has ever felt like the limiting factor rather than your deposit or your monthly budget, it's worth getting your numbers checked against the current market rather than assuming last year's answer still applies. Criteria like this move quickly, and quietly — it's exactly the sort of change a broker will pick up on that a quick online calculator won't.