Lenders reduce available loan size by nearly 20%
Some mortgage lenders have reduced the loan size they offer to customers by almost 20%, according to Mortgage Broker Tools (MBT).
Data from the affordability-first broker research platform shows that the average minimum loan size available to borrowers fell from £141,224, during the eight months between February 2022 and September 2022, to £114,776 during the same period between October 2022 and May 2023.
This represents a fall of 19% in the average loan size offered by some lenders, demonstrating the softening in mortgage availability over recent months.
Tanya Toumadj, CEO at Mortgage Broker Tools, says: “It’s unsurprising that the combination of increased living costs and rapidly rising rates have put the squeeze on mortgage affordability. And analysis of MBT data, which is based on thousands of real mortgage enquiries, shows that some lenders have reduced the average loan size they offer customers by nearly 20%.
“However, our data also shows that during this same period, there has been little change to the average maximum loan size available, meaning there are some lenders that continue to offer good affordability options.
“In this environment, brokers can’t take affordability for granted. The market is becoming more complex and researching the best options for customers from a wide range of lenders could make the difference between whether or not they are able to achieve their goals. Fortunately, it’s also never been easier for brokers to carry out that research if they make use of the technology available to them, but which platform should they choose? As complexity increases, accuracy becomes even more important, and research confirms that MBT offers brokers the most accurate affordability platform available in the market.”