This Week's Insights 29/07/19
Different results for the same lender
Increasingly lender calculators are returning multiple affordability figures for a single case and the reasons are not consistent. The most common purpose is to offer increased affordability for customers that want 5 year fixed products (e.g. Santander, Skipton, Principality and Kensington). However, Virgin and HSBC use the second amount to indicate the affordability that would be available if the customer had a higher deposit and could benefit from an increased income multiple. Finally, Leeds and Kensington show an affordability range which is dependent on credit score. MBT Affordability already returns multiple lender results and we are working on how to make this new element of affordability complexity as clear as possible for our users.
Pension Contributions and Affordability
Most lenders ignore specific pension contributions figures when assessing expenses and instead make assumptions in their ONS calculations. However, Santander and Coventry count them as an expense and Skipton include them if the pension is a final salary scheme, resulting in lower affordability for many Government employees, such as Police, NHS etc. As you can see, the rules are complex and varied so why not let MBT Affordability take the strain?
MBT Affordability Statistic of the Week…
Based on all of the real Company Direct cases run through MBT Affordability in the last month, the maximum affordability league table top five was: 1. Newcastle 2. Sainsbury’s 3. M&S 4. Santander 5. HSBC. Maybe supermarkets are where company directors should shop for affordability?
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