This Week's Insights 19/09/2019

Residential Properties in the Background

Following on from last week's 'BTL Properties in the Background - Help or Hindrance?' what impact does a background residential mortgage have on affordability for a second mortgage?

Lenders fall into two camps on this issue. The first look at the affordability of the new mortgage in isolation and treat the payments on the first mortgage as committed expenditure. The others assess the overall affordability of the existing and new mortgage. This can create large differentials between the top and bottom lenders.

We reviewed a real life case for a couple with a joint income of £77,000 and an existing residential mortgage of £205,000 with monthly repayments of £711. The range of affordability for a second home mortgage was £69,960 to £346,322 and only seven lenders met their required loan amount!

It's not easy to remember which lenders do what, so let MBT Affordability take the strain!

MBT Affordability Statistic of the Week...

Based on all 'loan term of 5 years or less' cases run through MBT Affordability in the last month, the maximum affordability league table top five was:
1. Newcastle
2. Leeds
3. M&S
4. Barclays
5. Platform

If you have any requests or comments about 'Mr Affordability says...' please email me at mraffordabaility@mortgagebrokertools.co.uk.

Thank you

Mr Affordability

Lewis Lenssen