MMR Pointless Excercise?

wrkactjob

Will any financial body in the UK actually say "you can afford a mortgage now but if rates were to rise by 3% we believe you wouldn't be able to afford one and on that basis we will not be lending to you"?

I just don't think so.

Most institutions questioned seem to indicate they are already using MMR in their calculations and they do not anticipate any increase in declines. In other words everyone applying for a mortgage prior to MMR will also be eligable post MMR rules.

And who is to say that once being granted a mortgage you then go out and spend spend spend on credit to the point where you clearly would be in trouble if interest rates ever went back up to 16%?

The banks/institutions obviously don't want any rules/restrictions that will stop them from selling products and turning a profit so its just a ploy by the FCA to make lenders seem more responsible without it actually meaning anything.

kingstreet

Getting a mortgage is not in question.

It's the amount you can borrow which will be affected. Student loan payments, ground rent and service charges, childcare costs are having an impact on our clients already, regardless of the rates involved.

dimbo61

NO NO NO
Already turned one person down I know!

ACG

turned them down?

As kingstreet says its the affordability not the credit worthiness of people that is being assessed differently. So you are unlikely to see more declines, just less money being offered - which is entirely different, although amounts to the same thing.

amnblog

MMR can only have a negative effect on apporovals.

I suspect the biggest impact on approval rates will be on direct to lender applications.

spidercrab

It'a proper pain. I was accepted in January for remortgage - unfortunately I ran out of time and mortgage offer ran out. I reapplied this week and was turned down. I can easily afford the small amount I asked for - they will lose business with these strict new rules.

amnblog

Lenders are not struggling to meet their new business targets.