HSBC has become the first major British bank since the 2008 financial crisis to offer home loans worth up to 6.5 times a borrower’s annual salary — a move that signals a fresh loosening of mortgage lending standards across the UK banking sector.
The new offer, launched this week for HSBC Premier customers, allows qualifying borrowers to access the highest income multiple available among major lenders. To be eligible, applicants must provide at least a 10% deposit and either earn £100,000 a year or hold the same amount in savings or investments with the bank.
The change marks a notable shift in policy for HSBC, which was once known for its cautious approach to mortgage lending. The bank previously raised its income cap for first-time buyers to 5.5 times salary in September, but the latest offer extends even further, outpacing rivals such as Nationwide — which lends up to six times income under its “Helping Hand” scheme — and Halifax, which caps at 5.5 times for borrowers with larger deposits.
Mortgage experts say the decision reflects intensifying competition in the housing market. “HSBC has gone from being one of the more conservative lenders to being more generous than virtually any other bank or building society,” said Aaron Strutt of Trinity Financial. “This income stretch mortgage is punchy, and borrowers will really need to think carefully before taking on such a large amount.”
The move comes as the Bank of England, the Financial Conduct Authority (FCA) and the Treasury encourage lenders to expand mortgage access to help more people buy homes. The average house in England now costs 7.7 times the average full-time salary — and 5.9 times in Wales — leaving many first-time buyers priced out of the market.
Lending restrictions introduced in 2016 limited banks to issuing no more than 15% of new mortgages at income multiples above 4.5 times salary. However, with affordability stretched to record levels, regulators have begun reviewing those caps. The Bank of England has allowed temporary exemptions for lenders, provided the overall share of high-income loans remains below the national limit.
At the same time, new FCA guidance has prompted banks to reduce the “stress test” rates used to assess affordability, effectively enabling larger loans.
While some view the changes as a practical response to rising property prices, others warn they could reignite risky borrowing behaviour. “We all want more people to get on the housing ladder, but we could be baking in long-term risks for both borrowers and lenders,” said James Daley of Fairer Finance. “The real problem is stagnant wages and persistently high house prices.”
HSBC said all applications will continue to undergo “stringent affordability checks,” stressing that the higher limit is designed to help financially stable customers close the growing gap between earnings and property values.
The bank’s move underscores a wider shift in the mortgage market, as lenders balance regulatory caution with the need to sustain lending volumes. With the Bank of England reviewing its lending caps, HSBC’s decision could set a new benchmark — and reignite debate over whether Britain’s housing market is heading back toward pre-crisis habits.
