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Habito: Mortgage applications declined based on travel costs

Jake Carter

March 25, 2021

mortgage travel

Mortgage applications are being declined by lenders on the basis of the cost of a rail season ticket, according to Alex Winn, mortgage expert at Habito.

Winn said: “We had a case recently where the customer was planning to move from London to Brighton.

“Once the mortgage underwriter had added the additional travel cost of £400 per month to their affordability calculations, the mortgage was deemed unaffordable.

“This was clearly a significant new expense that the applicant hadn’t had to pay in the past, which is why it was flagged.”

This follows the news that Nationwide plans to allow all 13,000 office-based staff to work remotely permanently.

Winn believes that a lot of buyers are “excited about the possibility of quitting the rat race and swapping their city life for a more scenic one.”

However, despite buyers increasingly no longer needing to live close to city centres, travelling from further afield – even on a less frequent basis – could still prove expensive, and this is being taken into account in mortgage applications.

Winn said: “We are seeing lenders paying attention to the distance of the property from their employer’s address.

“Mortgage application borrowing limits are calculated by gross (pre-tax) salary, but commuting costs are calculated net.

“Taking all these costs into account gives a full picture of mortgage affordability, but not every lender takes the same view, which is why it’s always worth getting advice from a broker who can advise you on the best lender and best mortgage for you.”


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