MBE 2016: Lenders must improve online affordability calculators – FCA

Ryan Bembridge

October 14, 2016


Lenders need to improve often misleading online affordability calculators, Lynda Blackwell, mortgage sector manager of the Financial Conduct Authority, has warned.

Speaking at the Mortgage Business Expo 2016 yesterday, Blackwell also told brokers that a significant disparity in lenders’ maximum loan amounts makes it difficult for them to accurately tell their clients how much they can borrow.

She said: “We suggested following followed the Responsible Lending Review that there really needs to be improvements in lenders’ online calculators to ensure that they more accurately reflect what a borrower might reasonably expect to be able to borrow, because there was quite a discrepancy between what they were telling them and what the borrower could actually get once they had gone through the process.”

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She added: “The range of maximum lending amounts varies considerable from lender to lender.

“Some allowed for a higher level of expenditure while others took into account a higher level of variable income.

“It will be interesting to see how firms adapt their approaches to assessing affordability once they look to grow market share.

“The fact that you get big differences in the maximum loan amounts that lenders are prepared to lend obviously makes it difficult to for you to advise your clients on what their borrowing capacity might be.”

Blackwell told the crowd that the regulator will continue to monitor and feedback on both stress test and expenditure data.