According to the Sunday Telegraph, this will be to reflect rising energy bills caused by the increased cost of wholesale gas.
Energy prices are set to surge this year when Ofgem’s price cap rises in April from its current level of £1,277 to about £1,877. This could potentially add hundreds of pounds to household expenses.
The government has been urged to assist vulnerable households to pay for rising bills and Ofgem is currently consulting on how it calculates the energy cap. Ofgem will make its decision early next month.
HSBC refused to comment on possible affordability changes when contacted by Mortgage Solutions.
Sensible but harmful approach
Considering rising energy bills when calculating mortgage affordability is a responsible move but could have negative consequences, industry figures have said.
Colin Bell, COO and co-founder of Perenna, said: “It’s sensible that big lenders like HSBC are considering more stringent affordability tests in the context of increasing energy costs. However, this could have harmful consequences on the most vulnerable customers’ opportunity to refinance.
“In the worst possible scenario, we could see an increase in mortgage prisoners who end up overpaying for their mortgage while at the same time facing higher energy prices. Lenders will need to factor in higher energy prices, rising inflation and rising interest rates when looking at a consumers’ affordability, which will make mortgage deals harder to secure in 2022 compared to 2021.”
Katie Brain, insight analyst – banking at Defaqto, added: “Lenders will be reviewing their underwriting policies to ensure they are lending responsibly, particularly with inflation at a high level, so we may start to see more restrictions to how much they are willing to lend.”
