Anybody who keeps a close eye on the mortgage industry – and we know there are plenty who do – will understand that it can be a pretty flexible and changeable thing. A movable feast, if you will.

This means trends come and go, things move and shift, and we as industry experts look to stay on top of it. We also look to relay news and updates to you through our blog.

This is primarily done with the aim of providing mortgage-seeking contractors and freelancers with the kind of information that will be useful to them. And in a move that is true to form, the latest piece of news we have chosen to cover involves a growing mortgage affordability theme. 

So rather than set the scene any further, shall we dive right into it?

What’s this news then?

According to new data from Mortgage Broker Tools (MBT), the average maximum loan size available to mortgage applicants reached its highest point in 2021 last month.

September saw this average figure reach £254,821. Compare this to the same figure in January – a significantly lower £234,224 – and this is a really interesting statistic.

The growth was driven by greater affordability options for first-time buyers. In fact, the average maximum loan for first-time buyers was £276,060 in September 2021. This is up from just over £230k in January of this year.

What does this all mean?

It means that some lenders are willing to offer greater sized loans to applicants. They’re not doing this out of the goodness of their heart though – it’s more about securing the business of people seeking to buy their own home ahead of the competition.

This has been brought about in various ways, including lenders making changes to their affordability calculators and higher loan-to-value offerings. 

Is securing a mortgage easy at the minute then?

It’s unfortunately not quite that simple. According to the latest information from the MBT Affordability Index, around a quarter of mortgage applications are still being rejected. This means that while maximum loan value might be going up, plenty of people are still not doing enough to demonstrate affordability.

This is historically something particularly problematic in the world of contractor mortgages and freelancer mortgages. This is a major reason why employing a contractor mortgage broker or getting some mortgage advice can pay real dividends.

Will this continue?

It’s certainly possible. Market competition means that major lenders are having to find ways to secure the income they need through the mortgage market.

While they will not be taking any unnecessary risks, the higher average loans indicate that lenders are willing to offer suitable candidates slightly more bang for their buck in order to try and move ahead of their competitors.