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Consumers underestimating mortgage availability

Consumers underestimating mortgage availability

Category: Mortgages

Updated: 08/07/2009
First Published: 07/07/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers are underestimating the availability of mortgages in the UK property sector, with many ruling themselves out of the market despite being eligible for a home loan.

Britons believe salary multiples to obtain a mortgage have worsened since the beginning of the year, with the average thought to be 3.1 times an individual's salary, research from Unbiased.co.uk has found.

A third of consumers think lenders have restricted the value of a home loan to the equivalent of 2.5 times that of a yearly wage.

However, data shows that less than one in four people (24 per cent) think they could borrow a four times salary mortgage, down four per cent from the beginning of the year.

In fact, most lenders have home loans equivalent to four times a borrower's annual wage, although a deposit of at least 20 per cent is usually needed to be eligible for the most competitive deals.

"There is a lot of consumer confusion out there. It is not surprising that many potential homeowners have taken a pessimistic view of lending criteria and what income multiples are available to them," said the website's chief executive, David Elms.

"Many may be unnecessarily putting off buying a property due to their belief they cannot obtain their required mortgage."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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