MBT: Third of self-employed mortgages deemed unaffordable

Jake Carter

April 12, 2021

lockdown savings

Almost a third of self-employed mortgages have been deemed as unaffordable in 2021, according to Mortgage Broker Tools.

Research by MBT shows that 71% of self-employed cases processed through its platform in January 2021 were affordable, with 27% deemed to be unaffordable based on the required loan amount.

It also found that the average maximum loan offered to self-employed mortgage applicants is £221,400 – a decrease of 3% from the last peak in August 2020.

Whilst the minimum loan available to the self-employed recovered to £118,800, a 45% increase on its lowest point last April and a rise of 43% on November’s figures.

During a survey, it was revealed that 80% of self-employed Brits have been rejected when applying for a mortgage, 36.6% of applicants have faced at least one rejected, and 32.8% were rejected because their credit rating was not good enough.

David Baird, mortgage and protections advisor at Aventur Wealth, said: “COVID-19 has had a huge impact on self-employed mortgages as we have seen increased discrepancy in the market.

“From one major lender (Santander) restricting all lending for S/E applicants to 60% (In January – now at 75%) to others carrying on as normal it has caused more confusion for the average buyer.

“Personally I have not seen a decline in acceptance rates, instead it has caused an increase in time taken on my part in researching the right lender for the right applicant.”

Sign up to our daily email