PCP Vs Lease - different effect on mortgage?

judochop_2

Hi Everyone

I'm hoping someone can offer some advice!

I've recently got a new job, which comes with a monthly car allowance. The car has to be less than 4 years old at all times, so I've decided that in all likelihood i'm going to get a new car on either a Personal contract plan, or personal contract hire / lease.

I know the main differences between the two, and the pros and cons - but I have a more specific question that I can't find the answer to.

I'm going to be applying for a mortgage next year, and I want to know if there are any differences in the way that experian, and the mortgage lenders view leasing vs PCP

I know that under a PCP, the total amount outstanding including the final baloon payment is considered on my credit report as a loan, and therefore counts against me, however is contract hire, or leasing, considered in the same way? I.e If I lease a car, is it going to make getting a mortgage easier than if I go down the PCP route?

I can get a really good deal from Audi on an A3 cabriolet at the moment on a PCP, inlcuding £2k scrappage allowance (for my car thats worth about £200!!) and I like the idea of my company effectively paying for me to build up equity in the car, so I will go down that route, UNLESS getting a lease does not affect the chances of me getting a mortgage in the same way....

Does anyone know the answer?

herbiesjp

Lenders look at monthly affordability, and what the cost of each would be on a monthly basis.

They then annualise that that figure, and deduct from your income before applying any income multiples etc.

So if PCP/lease is £250pm then they would annualise: £250x12 = £3000

They would then deduct from your income

Then apply multiples.

So the only difference between the two would be if the monthly amounts were different, and the subsequent effect it would have