We are now well and truly into the Financial Conduct Authority’s new set of mortgage rules (Mortgage Market Review or MMR)– the last few weeks have been interesting but also somewhat frustrating.
At the heart of MMR is a new affordability check, that will see applicants asked about their income and outgoings including for example childcare costs, gym membership and how often the eat out.
Now my first point is that prior to owning a property, I had no childcare costs, I did belong to a gym which I never attended and ate out about 4 times a week. I have never had so much disposable income since that time, yet I lived permanently in my overdraft.
As soon as I got my first mortgage I cancelled my gym membership and didn’t eat out again for about 2 years. Having finally made the adjustment to homeowner, and once again got some money in the bank I fell pregnant, so basically my “going out” money was transferred to my “childcare” costs.
The FCA said that the changes were designed to "hardwire common sense" into the mortgage application process, which on the surface makes sense. The only problems seem to have come when lenders start interpreting these guidelines for themselves.
Nearly all the lenders we deal with have brought in new systems and tweaked their affordability calculators to take account of the new rules, some of them did this way back last year so the transition has been fairly seamless. Others are taking things to the extreme. Naming no names, but one particular lender seems to want to know how much male clients are spending on male grooming products. I am not sure how to answer this – what happens when Boots are doing a 2 for 1?
For more information about MMR or mortgages in general contact us or call our team on 01628 507477.
Recent posts
Autumn Budget 2025 Predictions: Mortgage Market
11 days ago
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
Landlords could face a new tax this autumn
14 days ago
The chancellor has advised that landlords could have another tax to pay this autumn as the Treasury decide whether to extend national insurance contributions to rental income.
According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes.
More than a quarter of UK adults in long-term relationships (26%) have reported that despite living together, they keep their finances separate from one another.
There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.
Delayed Start Mortgages
6 Aug 2025
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
Green Mortgages | Rewards and Benefits
4 Aug 2025
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
More information
Trusted by
