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Mortgage lenders offering larger loans but product options tighten – MBT

  • 09/07/2021
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Mortgage lenders offering larger loans but product options tighten – MBT
Over the last six months, fewer lenders have been able to provide the credit requested by mortgage borrowers despite the average maximum loan size rising.


Analysis by Mortgage Broker Tools (MBT) showed that in June, the largest average loan size available to all borrowers was £243,250. This was a four per cent uptick on the maximum that could have been offered in January. 

However, the percentage of lenders able to meet this loan amount fell from 80 per cent in January to 73 per cent in June. 

For first-time buyers, the largest average loan rose 13 per cent to £261,290 in June primarily driven by the return of high loan to value (LTV) products. However, while 86 per cent of lenders were able to provide this amount in January, just 72 per cent were able to do so in June. 

The trend of fewer lenders willing to provide maximum loans was seen across all borrower types. 

For home movers, the maximum loan available increased from £285,860 in January to £292,149 in June but over the same period, the proportion of lenders able to meet this dropped from 82 per cent to 74 per cent. 

For the self-employed, the largest loan sizes grew from £221,400 at the start of the year to £233,300 last month. 

Over the six-month period, the percentage of lenders meeting this requirement for the self-employed fell from 71 per cent to 69 per cent.  

For remortgagors, the average loan size actually decreased from £192,065 to £188,500. However, there was still a decline in lenders providing this amount as this dropped from 86 per cent to 83 per cent. 

Tanya Toumadj (pictured), CEO at Mortgage Broker Tools, said: “Even though the lenders are loosening restrictions and offering larger loan sizes, borrowers are finding it harder to secure the loan size they require, and we’re seeing fewer lender options available than we did at the start of the year. This isn’t because borrowers are asking for more – the average requested loan size hasn’t changed. So, what’s happening? 

“As we emerge from the pandemic and lenders evolve their criteria and risk appetite, we’re seeing an increasingly diverse approach to affordability calculations and this means borrowers, with their own unique set of circumstances, are able to secure very different loan sizes from one lender to the next. The good news is that the average maximum loan available is higher now than the start of the year and, while the number of affordable lenders is falling, there are still plenty of affordable options – if you know where to look. 

“Comprehensive and accurate research can prove the difference between a mortgage enquiry successfully progressing to completion or falling at the first hurdle.” 

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