The stricter rules seem to be having the expected effect of protecting borrowers from unaffordable loans. But people with years of borrowing under their belt are falling victim to the rigorous assessment when they apply for new mortgages to downsize or a lower rate product. They even want to pay less. Really, they shouldn’t have an issue finding an affordable mortgage.
When the new affordability criteria came in, transitional arrangements were put in place to protect existing borrowers who aren’t adding to their loan or extending the term. So, in theory, these borrowers should not have to deal with multiple rejections, which is what is happening.
Also, if a borrower’s new terms are likely to exceed state retirement age, lenders won’t let them remortgage unless they sign up to shorter lending period, potentially making the loan unaffordable. This is leaving experienced borrowers with nowhere to go.
What should be a relatively straight forward process has turned into a labyrinth of dead ends for many people.
It seems lenders aren’t going to clear up this matter any time soon. So, if you want to port or remortgage, you’re better off talking to brokers. Our advice could prevent you wasting precious time and energy dealing with a system that’s not quite behaving as it should.