MBT affordability index reveals startling difference in lender loan offerings

04 December 2020

The latest MBT Affordability Index has found that the average maximum loan available to mortgage borrowers in November was £278,145, while the average minimum loan was just £133,166.

This represents a startling difference of £144,979 between the average maximum loan and the average minimum loan available to customers, and this difference alone is more than the average price of a property in the North East of England. Figures from the ONS* say the average property price in the North East is £136,262.

The latest MBT Affordability Index shows a consistent trend in the large spread of average maximum and minimum loan sizes available from lenders, while the most notable trend in this month’s report shows a sharp uplift in the average loan size requested by Remortgage customers – from £183,471 in October to £198,829 in November.

At the same time, the average loan size requested by Home Movers has fallen from £248,950 to £238,000, as has the maximum average loan size available to customers in this category. In October, the maximum average loan size available to Home Movers was £318,571 and this dropped to £307,440 in November.

The picture for First Time Buyers has remained relatively consistent, although the minimum average loan size available to customers in this category fell to £130,333 in November from £140,828 in October.

Full details from the Index are available below and more information is available at www.mortgagebrokertools.co.uk

Tanya Toumadj, CEO at Mortgage Broker Tools, said:

“One of the purposes of the MBT Affordability Index is to demonstrate the vast spread in loan sizes that are available from different lenders to customers with the same set of circumstances. And there are few clearer ways of demonstrating this than showing that it’s possible to buy a whole property using the difference in the average loan sizes available.

“With this is mind, it’s absolutely vital for brokers to shop around to ensure that they choose the lender that best matches their clients’ requirements. It won’t always be the same lender, or set of lenders, and while we have seen a relatively consistent picture in the spread of maximum and minimum available average loan sizes available, there has been plenty of movement from individual lenders and within particular niches.

“Staying up to date with all of these changes can be time consuming and difficult. This is why it’s so important that customers seek professional advice from a mortgage broker, and that brokers make use all the technology they have available to them, including platforms like MBT Affordability, which can help them to carry out more extensive research, more accurately and more quickly.”