The less you earn the more you pay???

llcoolfay

I’ve just been playing round with the mortgage search engine on moneysupermarket.com and it would appear that if I earned an extra %k I’d be eligible for cheaper mortgage products.

The only detail I change is my salary (up it 5k to 25k) and seemingly my current provider (Northern Rock) will offer me a product which is £100 a month cheaper.

When I think about it, that’s life, the less you have the more they make you pay, but are there any ways round it or any common/simple explanations?

Thanks.

Leon_W

Simple explanation.

The ultra cautious lender will offer say 2.5 X Single Income maximum. Very very cautious indeed. Because they are taking no risks (relatively) they can afford to offer a better rate as the level of defaulting should be low.

Alternatively we have the more agressive lender willing to offer 4.5 X income which is a greater risk which meens higher rates !

I think the reason you had differering Northern Rock mortgages is because they will lend more (at a higher rate) on their Together loans.

kingkano

Exactly as Leon W says. The differences can be staggering too. We were looking at the together at one point and its now 6.39 I think. Luckily we didnt need the 125% portion, we just wanted higher borrowing so they offered us their regular product which will be more like 5.49. The difference in those rates would make you fall out of your chair on most mortgages!

llcoolfay

Hmmmm, I know I need to speak to a professional face to face but it would appear from the net that if I earned just an extra 1k a year more the products I would then qualify for could save me £80 to £100 a month.

Maybe I could get a paper round!

Do part time earnings count in full or half? And would I need three months pays slips as per the usual?

Cheers for the help.

kingkano

This depends on the bank. For example Northern Rock only count 50% but I think Halifax (dont quote me on it) count 100%. And it also depends on how 'guaranteed' the extra earnings are. Dont forget a second job usually gets taxed 40%

They payslips thing also varies massively. Our application with Northern Rock we dont need 3mths I dont think. They have a fast track kinda service. All depends....