Do all mortgage lenders use the 4.5x salary or are they more flexible?

Thrugelmir

Crashy_Time said:

Thrugelmir said:

savefortherain said:

SavingPennies_2 said:

£500 a month *is* a lot for a salary of 17000 once you deduct council tax, utilities, food, living costs etc. and that's before repairs, unexpected emergencies, savings.. The bank wants to know you can afford it and have wiggle room if your circumstances or the interest rates change, saying you will scrimp to get by or take a second job might work in reality but won't cut it with the bank.

The whole 4.5x system seems designed to not just protect from reckless borrowing/lending but also prevent FTBs getting on the ladder.

Following the collapse of Northern Rock (and others). The mortgage market review was conducted and changes implemented. Not as simple as an income multiplier.  Lenders have constraints as to exposure. 

And yet the bubble is way bigger than it was back then....

Nah. Lending has been far more controlled for a number of years now. Remaining interest only mortgages are declining in numbers. The biggest issues are that interest rates cannot go any lower, mortgage terms cannot be extended any further and the broader economic outlook is challenging in the short term. A ceiling will be hit.  With inflation forecast to hit 5% there's more than one way to skin a cat.