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Lenders Improve Affordability & Income Multiples


The difficulty in the mortgage market at the moment is that rate changes are happening at a rate of knots, with lenders operating a scatter-gun approach.

Each week there are some that rise and some that are cut as lenders play off against each other and the Best Buy tables to target certain areas where they want to do business. Keeping up to speed with it is a full-time job, (which is luckily exactly what we do!), but it can be frustrating when the paperwork is assembled only to find that the rate has changed.

The battleground between lenders is not just all about price however, with a new front opening up where affordability is concerned. Santander, for example, will now lend up to 5.5 times income for those earning more than £100,000 up to 75% Loan To Value, (LTV).

Halifax have made their own tweaks and will now lend 4.49 times income over £500,000 and they will also lend 5 times income on loans up to £500,000 where the clients jointly earn £75,000 up to 75% LTV.

Barclays have also made improvements to their maximum income multiples and Accord have increased the amount of bonus they will take into account from 50% to 60%.

It is definitely worth shopping around or speaking to a professional broker as lenders now vary dramatically in how they deal with affordability and how they also treat outgoings such as pension payments and school fees.

Of course stress testing is still in play for those borrowers who do not take at least a 5 year fixed, with lenders now obliged to check that a borrower can afford the loan not just at the introductory rate, but also at a rate of 3% above the loan reversion rate. This is the rate the mortgage reverts to after the initial fixed or discounted rate period, generally around 7%.

However, all of this means that borrowers may well be able to borrow that little bit more than they did a few weeks ago from a wider range of lenders.


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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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