Mortgage lenders have shrunk the size of loans they offer customers by nearly 20% according to a new report from Mortgage Broker Tools (MBT). The report indicates a notable softening in mortgage availability in recent months.
MBT’s data, derived from their affordability-first broker research platform, reveals that the average minimum loan size available to borrowers fell from £141,224 during the eight-month period between February and September 2022, to £114,776 during the same timeframe from October 2022 to May 2023. This equates to a 19% decrease in the average loan size offered by some lenders.
Tanya Toumadj (pictured), CEO at Mortgage Broker Tools, said: “The blend of increased living costs and rapidly escalating rates have understandably squeezed mortgage affordability. Our data, which is based on thousands of actual mortgage enquiries, indicates that some lenders have trimmed the average loan size they offer to customers by nearly a fifth.”
Despite this reduction in minimum loan sizes, MBT’s data shows that the average maximum loan size available has experienced little change during the same period. This suggests that a number of lenders continue to provide attractive affordability options.
In this current landscape, Toumadj stresses that brokers cannot take affordability for granted, with the market’s increasing complexity demanding thorough research of available options for customers from a broad range of lenders.
She added: “Fortunately, utilising the technology available has never been easier for brokers conducting this research. However, as complexity intensifies, accuracy is paramount. Our research confirms that MBT offers brokers the most precise affordability platform available in the market.”
