mortgage that goes on what you can afford not what you earn

trumpet_2

My brother in law says there is a building society that will offer a mortgage based on what you can afford ,not on what you earn.
Anyone know who it is.

AndrewSmith

He is half right. What he is referring to is called an affordability calculation.

The lender will assess the amount you can borrow by looking at your net or gross monthly pay in relation to what your new mortgage payments will be.

It is still however calculated relating to your earnings.

It can work out sometimes that you borrow more, othertimes that you borrow less than the normal income multiples.

There are a number of lenders who operate on this basis, Nationwide for example.

Andy

trumpet_2

Thanks for the prompt reply he has been paying £750 a month rent for over a year without any problems,but like a lot of people would have to earn an awful lot to qualify for a usual mortgage even though their outgoings are low.

WSO

When we arranged our fixed rate with HSBC in Sept 04 they used affordability rather than multiples so were suprised when they were happy to lend us up to about 4 times our joint salary.