Mortgages have been getting bigger and people have been paying them off for longer, thanks to house price inflation and low rates. In January 2016 the average mortgage size was £166,000 (according to banks) by January 2022 it is almost £200,000. Allied to this the percentage of mortgage at four or more times a buyers salary has increased.

As it stands lenders are barred from extending more than 15% of their new mortgage book to customers wanting 4.5x their salary or more. This is unlikely to change and short term, the lenders are reducing their multiples. For first time buyers, these are difficult days. They can afford afford the monthly mortgage payments, however raising the deposit and often a sum over the property value, is the tricky part.

Many buyers are lengthening the term of their mortgage, to keep initial payments down, leading to terms of up to 40 years. This may appear extreme, however you can always review the contract term after 2,3 or 5 years ie after the initial product term matures. Why not speak to Craig Scott to consider options on product and contract term or to review your current finances.