Mortgage Market Review

The Mortgage Market Review (MMR) comes into effect on the 26th April and will distinctly tighten up lending. Due to new MMR rules lenders have become stricter on their affordability calculators and we will find that a customer may not get offered the mortgage loan amount they require or in worst case scenarios not even be offered a mortgage.

The big difference to the past is lenders will look a lot closer at a customers expenditure and how they spend their money. Stress testing will also be much more vigorous whereby lenders will ascertain whether you can afford the mortgage payments assuming a higher interest rate.

Although there are many negatives of the MMR one advantage is that affordability can now be extended past a 25 year term. This means that is some cases a customer may need to opt for a longer term than 25 years to meet the lenders affordability calculator, but in doing so may obtain the mortgage loan amount they require.