The Mortgage Market Review (or MMR) was a comprehensive investigation of the mortgage market conducted by HM Government after the 2008 Credit Crunch and subsequent worldwide financial crash. It was proposed in 2009 and came into force in 2014.
The changes implemented as a result are directly because of its findings, which concluded that there were too many instances of high-risk lending prior to the 2008 financial crisis. This meant many people were unable to afford their mortgage repayments and further exacerbated the resultant crash. As a result, the mortgage world has toughened up. No more self-certified mortgages (or ‘liar loans’), fewer interest-only mortgages and the requirement for mandatory advice on all mortgage products.
Part of the review requires lenders to implement a financial ‘stress test’. This means that lenders will want to make sure that even if (and when) interest rates rise their borrower will still be able to pay the increased mortgage repayments. In order to do this, they must illustrate that they have sufficient and reliable income, that they have limited borrowings and that their finances are stable and predictable.
Basically, lenders are now required to make an effort to establish the affordability of the mortgage they are granting and they must allow for changes in circumstances, primarily the increased cost of borrowing in the future.
To speak to a mortgage adviser, contact us on 01628 507477.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
Data shows landlords could miss out on green mortgages due to expired energy performance certificates.
Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.
Pros and Cons of Equity Release
10 days ago
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
Your House Viewing Checklist
11 days ago
It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.
Half of over 60s predicted to benefit from accessing housing wealth through Equity Release
14 days ago
There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish.
Average Age of the First Time Buyer in the UK
21 days ago
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
Delayed Start Mortgage from Skipton
23 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
Gardening Tips for Beginners
28 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
More information
Trusted by
