HSBC will now let its wealthy customers borrow up to 6.5 times their annual income if they get a mortgage with the bank.

For someone on a higher income, it could add up to an extra £200,000 or more to put towards a home.

Often, banks cap the amount they will lend at 4.5 times the borrower's salary.  

However, HSBC's 6.5 loan-to-income deal is only available to its Premier banking customers.

To join Premier banking, someone needs to have a yearly income of £100,000 or more, or have £100,000 in savings or investments with HSBC.

It means a Premier customer earning £100,000 per year could borrow up to £650,000, compared to £550,000 previously.

Someone earning £200,000 a year could see their maximum borrowing increase from £1,100,000 to £1,300,000, for example. 

HSBC says the extra borrowing is available to Premier customers buying or remortgaging with as little as a 10 per cent deposit or equity in their home. 

Oli O’Donoghue, head of mortgages at HSBC, said: 'We’re helping higher earners unlock greater flexibility to move up the property ladder or secure their next home with confidence.

'This increase reflects both our confidence in the financial resilience of our Premier customer base and our commitment to responsible, sustainable lending.'

It follows plans from the Financial Conduct authority, backed by Chancellor Rachel Reeves and the Bank of England, to loosen loan-to-income lending rules put in place after the financial crisis and allow people to borrow more relative to their salary. 

Is it a generous offer from HSBC?

Aaron Strutt of mortgage broker Trinity Financial says this policy change means HSBC is now more generous than virtually all of the other banks and building societies when it comes to mortgage lending. 

However, he also urges people to think carefully before borrowing so much relative to their income, especially if they are in a single-income household. 

Someone earning £100,000 a year who opts to borrow the maximum £650,000 in order to buy a £725,000 home could secure a rate of 4.27 per cent with HSBC.

That would equate to paying £3,527 a month. Given that someone earning £100,000 a year will be taking home £5,713 a month, they would be putting almost 62 per cent of their take-home pay towards mortgage repayments.

'This income stretch mortgage is punchy to say the least and borrowers will really need to think carefully before they take on such a big income multiple,' Strutt said. 

'Applicants will probably need to lock in for five years to get the highest loan amount so this does provide a bit more payment security. 

'Affordability is clearly a huge issue in the mortgage and property markets and HSBC is trying to address this, although at the moment mainly for higher earners.'

Simon Gammon, managing partner at Knight Frank Finance, added:

'This is the highest income multiple we’ve seen in years. 

'It reflects both a more confident regulatory environment – following the FCA’s recent move to give lenders more flexibility – and HSBC’s clear appetite to grow market share after several years of subdued activity in the property market.

'The real question is how much this will translate into demand, given the continued uncertainty around potential tax changes in the upcoming Budget.'