Virgin Money has made improvements to its lending policy.

It has increased its new build maximum LTVs and simplified its bonus policy.

The lender has also increased the maximum term at 95% LTV and updated its approach to adverse credit.

Maximum residential LTVs have been raised to 90% for new build houses and 80% for new build flats. For shared ownership, it can still lend up to 95% of the share of the property being purchased, including on new builds.

For LTVs up to 85%, Virgin Money will accept builders’ cash incentives of up to 5% without impacting the loan. Where the LTV is greater than 85%, cash incentives must be deducted from the purchase price.

Meanwhile, affordability calculations using annual, six-monthly or quarterly bonus payments for employed applicants are now based on the latest year’s bonus, at a rate of 60%.

The lender no longer requires a bonus to have been received after 2 December 2020, and it only needs to use a two-year average (or more recent year if lower) where the variable pay exceeds basic income.

In addition, Virgin Money has increased its maximum term at 95% LTV to 35 years, which means the maximum term for all of its mortgages is now 35 years.

Finally, the lender has reviewed its lending policy which is said will allow it to say yes to more customers with minor adverse credit and historical debt. It added that the refreshed policy is easier for customers who are worried about their credit to understand when it can help and makes its proposition more inclusive.