Mortgage lenders are restricting the maximum loan sizes available to higher income earners, according to the latest Mortgage Broker Tools (MBT) Affordability Index.
Data from the broker research platform shows that the maximum average loan size offered by mortgage lenders to applicants earning a household annual income of more than £100,000 fell to just over £657,000 in July, which is down from more than £670,000 in March. This compares to much smaller reductions of less than £2,000 in the average maximum loan size available to households earning smaller incomes over the same period.
Tanya Toumadj, CEO at Mortgage Broker Tools, said: “The cost of living crisis is impacting everyone, and we have already highlighted the disproportionate impact it can have on borrowers on lower incomes, whose disposable income is more significantly impacted by the rising prices of running a household.
“However, this data indicates that mortgage lenders are also restricting their appetite for lending large amounts to households on higher income levels, as appetite for risk contracts amidst the uncertain economic environment.
“This means that it is harder for borrowers to secure the loan size they want, whatever their circumstances, but there are still options. Our data shows that 90% of mortgage enquiries for higher earners are still considered affordable by at least one lender, whilst this figure for all enquiries has remained consistent at 76%.
“The key in securing the right mortgage is research amongst a wide panel of lenders and MBT Affordability offers brokers the largest panel in the market, ensuring they maximise their opportunity to secure the most suitable deal for their clients.”