The Mortgage Market Review (MMR) was a comprehensive review of the mortgage market to ensure its sustainability and that it works better for consumers.
It aims to ensure continuing access to mortgages for the great majority of customers, whilst preventing a return to the poor practices and lending criteria used previously by some lenders.
From first time buyers, to buy to let investors, the new rules will affect everyone taking out a mortgage.
How does the Mortgage Market Review affect my borrowing?
The review has resulted in greater affordability checks by lenders. Evidence of income will need to be provided, as will more in-depth analysis of an applicant’s expenditure.- It is now a requirement that mortgage sales are advised. This means that if you do not deal with an independent mortgage specialist, you will be required to attend a long interview process at a bank branch.
Stress testing mortgage affordability
From this review, lenders have also incorporated ‘stress testing’ into the application process where it is checked that an applicant will still be able to afford the mortgage in the future with an increase in rates. However, it is currently up to lenders to decide what interest rate to apply for the test.
Despite the increase in processes that MMR has added to mortgage applications, this review is positively helping to create a more sustainable mortgage market for consumers and the mortgage lending market is continuing to gain momentum.
If you have any questions on MMR or would like to discuss your borrowing options we will be happy to put you in touch with a local mortgage adviser. Please contact us in the first instance.
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