Increasing bills, tax rises, increased interest rates and big hike in cost of household basics such a food shopping have pushed some mortgage lenders in the UK to recalculate their background affordability models.
Home buyers and Home owners wanting to take out a new mortgage could soon struggle to get the size of loan they need, as banks have begin taking into account the cost-of-living crisis when calculating how much they can lend.
These changes with some mortgage lenders, with tighten their mortgage affordability tests, has made it harder for those needing a mortgage to borrow as much as was previously available.
By way of an example, Santander has recently applied changes to the way they calculate background affordability.
Many high street banks use household spending figures supplied by the Office for National Statistics (ONS) to assess a mortgage borrower’s spending, even if a mortgage applicant’s actual monthly outgoings are lower, to see if borrowers can afford their monthly mortgage after bills and expenses.
This ONS data will soon include higher energy costs, with the result that some people might not be allowed to borrow as much in the coming months when they apply for a new mortgage deal.
Its worth noting though that despite the recent Bank of England base rate increases, mortgage deals still remain competitive in the UK.
At Broadland Consultants, our expert Mortgage Brokers can review the whole of the mortgage market for you, so if you’re not able to achieve the borrowing you require with a lender, our Mortgage Advisers can assist in reviewing the market for you for a mortgage deal that can potentially help you get the borrowing you need.
If you’re based in Norwich or Norfolk, our Mortgage Brokers offer face to face meetings (video and telephone appointments also available)
You can also live search for a deal on our website here: https://www.broadlandconsultants.com/search-mortgage-deals/
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE