Large mortgages, high value mortgages or high loan to value mortgages are generally all different names for what is probably easier to describe as a big mortgage.
Of course, what constitutes a big mortgage for one person may be very different from another’s perspective, but regardless of the overall amount, it typically relates to the proportion of a property that’s mortgaged.
Those of us who remember life as a homeowner prior to the financial crash of 2007/8 will probably also remember that applying for a large mortgage was much easier than it is today. Indeed, self-certification mortgages enabled those looking to get a mortgage in the UK to simply state what they earned without necessarily having to back it up with evidence.
However, things have since changed. These days, banks tend to give mortgages to people on a multiple of 4.5 – that is, they will only lend 4.5 times an applicant’s earnings. Those who need more can apply for a large mortgage, but here banks are further restricted and must ensure that those who fall into this camp make up no more than 15% of new loans issued.
The issue here is that amidst the rising cost of living and escalating property prices, what someone can afford today – even on a multiple of 4.5 – may quickly change tomorrow as property prices increase, making it very difficult for those who have finally, and maybe only just, mustered the much needed deposit.
As a Guildford mortgage broker we often meet with first time buyers who’ve found their dream home, but who, after only a few weeks, get priced out by accelerating property prices over which they have no control.
As of December, this may change following recent news that the Bank of England is considering relaxing the rule that limits lenders from issuing large loans. Some lenders already offer mortgages based on an earnings multiple of 5.5, however, should the Bank of England ease the rules in December, it would lead to more lenders offering similar mortgage deals, wider mortgage accessibility and will no doubt be welcomed by first time buyers.
As a team of award-winning Guildford mortgage advisers that have access to some of the best mortgage deals in the UK, Complete Mortgages is already accessing large mortgages for a selection of our clients. However, this decision, should the Bank of England make it, would make mortgage affordability easier for a large swathe of Surrey homeowners.
In terms of whether or not this will happen remains to be seen. If it does, Christmas will have come early for many people who’ve been waiting too long to own their own property.
If you’re struggling to get a first time buyer mortgage, or if you’d like to find out exactly how much you can borrow, then contact Complete Mortgages, a team of highly experienced mortgage brokers in Guildford, on 01483 238280 or email firstname.lastname@example.org.