Affordability Calculators

Mon2907

I’m just interested really, could ask my broker 🤣 but we’ve been looking at moving home and obviously checking affordability first. Why are the maximum
loan values so different? For example with NatWest we can borrow up to 240,000, Halifax 220,000 and Principality 180,000. This was including all the same amounts for committed expenditure and gross salaries. We also have childcare ending in 6 months, and I was quite shocked to see the impact is has on affordability (understandably I know). For example, Principality would increase the offer up to 260,000 if we weren’t paying 500 per month childcare. Anyway, I was just curious.
Thanks. 

[Deleted User]

I had a case recently with 280k difference between affordability of High Street lenders.

The answer comes down to risk assessments.  Ultimately if everyone used the samw calculations and criteria then we'd only need 1 lender in the industry 

Mon2907

Deleted_User said:

I had a case recently with 280k difference between affordability of High Street lenders.

The answer comes down to risk assessments.  Ultimately if everyone used the samw calculations and criteria then we'd only need 1 lender in the industry 

Thanks for the reply - makes sense, and another reason why mortgage advisers are worth their weight in gold! Do all affordability calculators take into account stress tests and ONS data for outgoings that aren’t committed? I notice some were asking for more details than others too and wondered if other calculators had this already built into their calculators. 

ACG

The biggest difference I have seen is £12k with one lender, around £150k with most lenders and over £240k with another.

They all do things their own way, some use ONS figures for everything, others do not use them. They stress test at different rates, they want different amounts available after your mortgage and commitments etc. Usually you find that the majority of lenders fall in and around the same sort of figure and there are a few which will be a little above or below.