The tie-up with Octane takes the number of buy-to-let lenders on the platform to 66.

Octane Capital specialises in complex buy-to-let lending with no stress testing. The lender offers mortgages on residential and semi-commercial assets, multi-unit freehold blocks, homes in multiple occupation (HMOs), property above commercial, ex-local authority homes and holiday lets.

MBT Affordability tells brokers how much their clients can borrow from a panel of buy-to-let and residential lenders, based on affordability and criteria.

Tanya Toumadj (pictured), chief executive, said: “It’s great to welcome a lender like Octane Capital to the growing panel of MBT Affordability. Buy-to-let landlords are increasingly turning to more complex investments to achieve greater yields and the lending landscape is becoming more diverse to meet this changing dynamic.”

Looking at cases processed through the Mortgage Broker Tools (MBT) platform and industry data, the firm calculated this figure based on the average mortgage loan size of £200,000 and average proc fee of 0.4 per cent.  

MBT used information compiled by Trading Economics which said there were 80,000 mortgage approvals a month, with 80 per cent being processed through a broker, representing 64,000 cases. 

A survey run by Mortgage Brain earlier this year suggested 58 per cent of brokers rarely used affordability calculators from a non-top 10 lender, despite MBT data showing 10 per cent of all cases would not fit with one.

As a result, MBT suggests that brokers are missing out on placing 3,712 cases a month, which equates to 44,544 cases a year through an unwillingness to investigate a broader spectrum of lenders. 

Tanya Toumadj (pictured), CEO at Mortgage Broker Tools, said: “Old habits are costing brokers money.  

“We know that nearly six in 10 brokers rarely look outside of the top 10 when it comes to identifying a lender that can meet their clients’ loan size requirements, yet one in 10 cases don’t have an appropriate affordability match from the top 10 lenders.”  

“These may seem like small percentages at first, but they add up to big numbers in lost revenue,” she added. 

Mortgage Broker Tools assessed loan enquiries placed by intermediaries between January and August. The platform found that the percentage of enquiries considered to be affordable has dropped from 80 per cent to 73 per cent over the eight month period.

During this time, average house prices have risen by £11,000, or 4.4 per cent, from £251,832 to £262,954.

In more than 20 per cent of the cases that failed affordability checks, the loan amount was around five per cent outside of criteria.

House prices have risen by seven per cent in the last 12 months fuelled by the stamp duty holiday and pent up demand to move home after Brexit uncertainty ended and lockdown restrictions were lifted.

Economists say that due to a lack of supply of homes to buy and predictions that interest rates will fall even further, house price inflation is likely to be sustained. Capital Economics has forecast that the average mortgage interest rate will fall to 1.6 per cent from 1.85 per cent by the end of the year and house price growth for 2022 will be five per cent.

Tanya Toumadj, chief executive at Mortgage Broker Tools, said: “The strength of the property market over the course of 2021 has been well documented and it has naturally made it harder for buyers to afford a home of their choosing as they have needed to stretch their borrowing further to keep up with rising prices.

“However, buyers and brokers shouldn’t lose hope. Our data also shows more than a fifth of these cases that are considered unaffordable are less than five per cent away from there being a suitable affordable option. So, there are opportunities for many borrowers to secure the loan they need, as long as they work with the best lender for their circumstances.”

The MBT platform now hosts more than 100 residential and buy-to-let lenders allowing brokers to check how much their clients can borrow based on affordability metrics and criteria.

Steve Griffiths, sales and product director at The Mortgage Lender, said: “The pandemic has accelerated the pace of change in the way that people earn their incomes, with growing numbers of self-employed entrepreneurs and people earning income from multiple sources.

“With the ability to consider overtime and commission and to take profit before tax and salary for the self-employed, we provide more opportunity for clients to demonstrate their true affordability and this integration with MBT Affordability will help more brokers to realise the benefits of real life lending.”

Molo and Tenet tie up

Digital mortgage lender Molo Finance has joined the Tenet Group lending panel to increase its digital lending proposition.

Francesca Carlesi, chief executive and co-founder of Molo (pictured), said: “I’m excited to have joined forces with Tenet Group. As a result, borrowers will be able to access Molo’s mortgages through one of the UK’s largest financial adviser groups.”

Ben Wright, director of strategic development at Tenet, said: “We’re really pleased to make Molo’s mortgages available to our advisers. Molo’s online platform uses technology to create a great customer experience and chimes well with our own strategy of using technology to make everyone’s life a little easier.”

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.” 

On average, the maximum loan size offered by lenders was £243,400 in May this year, up by 2.5 per cent compared to the average £237,500 in May 2020.

By comparison, average house prices were up 9.5 per cent, or £22,000 in the past year, according to the Halifax House Price Index.

The MBT Affordability Index for May further found that the spread between the minimum and maximum loan sizes offered to customers had grown to £100,900 in May 2021, up from £89,893 in May 2020.

For first-time buyers, the average maximum loan size rose by 2.7 per cent to £253,764 in May compared to April 2021. For buy-to-let investors, the rise was 3.6 per cent to £362,750 month-on-month.

Tanya Toumadj, chief executive at Mortgage Broker Tools (pictured), said: “Property prices have risen at their strongest level in nearly seven years over the last 12 months, according to the Halifax House Price Index. Mortgage lenders have increased their appetite to offer customers larger loans in the same period, but not nearly at the same rate.”

Toumadj added that the spread was growing between the largest loan sizes offered to customers by different lenders.

In April, data showed there was at least one lender able to provide the loan requested by 70 per cent of self-employed borrowers compared to 64 per cent for those aged over 55. 

Nine per cent of borrowers aged 55 and over were unable to get a mortgage of any size, while this was the case for two per cent of the self-employed. 

Overall, self-employed borrowers and those aged 55 and over were having a harder time securing their requested mortgage loans in April. Across the market, lenders were able to fulfil the needs of 75 per cent of borrowers. 

Loan size gap 

The difference between loan sizes available to customers aged 55 and over was larger than the spread available to the whole of the market and to the self-employed.  

The largest loan available on average to a customer aged 55 or over was £287,540 while the smallest loan was £147,372 – a spread of £140,168.  

Meanwhile, the largest loan available to a self-employed customer was £231,206 and the smallest loan of £110,552, representing a difference of £120,654.  

For the whole of market, the largest loan available on average was £245,890 and the smallest loan was £145,742, a disparity of just £100,148.  

Different factors at play 

Tanya Toumadj, CEO at Mortgage Broker Tools, said: “The latest MBT Affordability Index shines a light on the challenge that mortgage customers aged 55 and over face in securing the loan size they want. 

“There are a lot of different factors at play here. Obviously maximum age at the end of the mortgage term, and anticipated retirement age play a significant role in how much customers will be able to borrow and lenders often have different criteria in these areas, but there are also other considerations.” 

“As customers grow older, in general, they also become wealthier and many will have additional sources of income to consider from investments and pensions. 

There’s a huge variation in the way that lenders underwrite these additional income sources and it means that the choice of lender can make a very significant difference to how much a customer aged 55 or over is able to borrow,” she added. 

Toumadj said: “We have spoken before about the importance of whole of market research and it’s even more apparent for this group of customers.  

“Every broker in the country will have a number of clients who are aged 55 or over and, if they are not using technology to research all of the affordability options, they are not giving their clients the strongest chance of achieving the loan they deserve.” 

Members who register for access to MBT Affordability will have free additional access to MBT Criteria Search for a limited time. The tool provides advisers with a search bar that allows advisers to research any panel lender criteria term.

Results are identified within the lenders’ own criteria guides and the exact wording is highlighted for advisers to review within the platform.

Richard Merrett, head of strategic development at SimplyBiz Mortgages, said: “With the limited housing stock available in the market, being able to give  customers as much choice as possible in their home purchase is a key factor in a mortgage adviser’s ability to provide solutions, and this often starts with maximising affordability potential.

“It has become quite clear over the past 12 months that it is not always the most obvious or familiar lender which  can deliver the best customer outcome.”

Tanya Toumadj (pictured), chief executive of Mortgage Broker Tools, said: “Affordability is a crucial part of the research process and more brokers are realising the importance of harnessing technology to make that process quicker, easier and more comprehensive.”

Analysis of cases processed through its affordability system found that 73 per cent of applicants had to go to a lender outside of the top 10 if they wanted to maximise on their affordability. 

For seven per cent of cases, the only lenders able to cater to a borrower’s needs were outside the top 10. 

The news comes after a survey conducted by Mortgage Brain found 58 per cent of brokers did not use lender affordability calculators when dealing with a top 10 mortgage provider. 

Tanya Toumadj (pictured), CEO at Mortgage Broker Tools, said: “The UK mortgage market is wonderfully competitive and diverse environment, which means there is usually a good solution for a client if you know where to look.  

“Often the best option is not found in the most obvious place and brokers who confine their research to the top 10 lenders risk missing out on the most suitable choice for their client.” 

The integration will be launched later this month.

MBT said the combination would enable brokers to source by affordability, rate, criteria and even current service levels depending on their client’s priority.

According to its website MBT has 65 lenders available through its residential and buy-to-let affordability sourcing, including four of the big six.

In February MBT added a free text criteria search function to its affordability offering, taking criteria details directly from more than 100 lenders’ online guides.

Meet client priorities

MBT CEO Tanya Toumadj said: “This partnership with Iress gives brokers greater control over the way they research and source the best product for their clients.

“So, for example, if borrowing as much as they can afford is the main priority for a client, followed by controlling monthly payments, a broker can research affordability first and then filter the results based on the rate and monthly payment.

“Having everything in one place is going to make the process so much easier.”

Also in February, Iress announced a partnership with Knowledge Bank that integrated its criteria search facility into the Iress Xplan platform.

Dave Miller, executive general manager of commercial at Iress, said: “Access to comprehensive yet timely research is an important part of the mortgage process, with brokers required to consider a wide range of factors when making recommendations.

“This is where technology can help make life easier and partnerships such as this with Mortgage Broker Tools are great news for brokers, as they provide a way for providers to work together to improve speed and efficiency.”