Mortgage Lending Tightening

Rico

Registered User
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Has anyone noticed a tightening in lending from Mortgage Providers, remortgaging at present and not getting the same level of positive response back as a few years back. Suppose with increase in ECB rate and stress testing its probably had a definite effect.
 
Yes. Many lenders assess an application based on a person's Net Disposable Income and how the proposed mortgage repayments relate to it. After so many interest rate increases, the repayments are a far higher percentage of NDI than they used to be, which has an immediate effect on the size of mortgage.

In addition, the Financial Regulator has increased the required stress-test rate in recent months.

Some lenders have countered these by allowing tax relief into their calculations (which they didn't do previously) and extending the maximum allowable mortgage term but in general, multiples of salary are lower than two or three years ago.
 
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