Choose your mortgage lender carefully to double your buying power
Choosing the right lender can make the difference between securing a detached house over a semi-detached property for home movers, according to MBT (Mortgage Broker Tools).
The business – which provides technology to mortgage advisers – found that the average maximum mortgage loan available to home movers was £318,571 in October.
But it said the average minimum available loan offered to home movers was £157,000 – a staggering difference of £161,571.
First-time buyers could borrow an average maximum loan available of £274,500 in October, while the average minimum available loan was £140,828, according to MBT’s affordability index.
That’s a difference of £133,672, which could be enough to upgrade from a flat to a semi-detached house. According to the Office for National Statistics, the average price of a flat or maisonette in the UK is £203,708, while the average cost of a semi-detached house is £230,455.
Tanya Toumadj, CEO at Mortgage Broker Tools, said: “There’s a huge disparity in the amount that different lenders are prepared to lend based on the same set of customer circumstances, and this could prove to be the difference in a home buyer being able to afford a bigger property or more desirable location.
“We know from reports from estate agents that larger properties and those with more outside space are in greater demand as a result of the pandemic and shopping around to achieve the best affordability calculation could help customers to achieve this.
“There are considerations in taking on a larger loan size but being able to upgrade the property they buy now, may save customers from making multiple home moves in the future and could ultimately save them money in the long-term.”