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.