Mortgage lenders are giving less generous lending terms to parents with young children than to childless couples. Childless couples can borrow up to 50% more than families with children, even if both families take home the same wages. Mortgage companies argue that the cost of raising children can result in parents not paying off their debts whereas childless couples have fewer outgoings and therefore are more likely to pay back their mortgage.
This kind of client analysis carried out by mortgage companies is a far cry from the practice of fifteen years ago when mortgage companies simply lent a couple a multiple of their combined income – usually three times their salary. These ‘affordability checks’ are all part of mortgage companies’ policy, devised to ensure that mortgages are paid back. A further symptom of this intense client scrutiny is that fewer mortgages are handed out: In the UK around 1500 mortgages are agreed per day as opposed to 4000 fifteen years ago.
This kind of client analysis carried out by mortgage companies is a far cry from the practice of fifteen years ago when mortgage companies simply lent a couple a multiple of their combined income – usually three times their salary. These ‘affordability checks’ are all part of mortgage companies’ policy, devised to ensure that mortgages are paid back. A further symptom of this intense client scrutiny is that fewer mortgages are handed out: In the UK around 1500 mortgages are agreed per day as opposed to 4000 fifteen years ago.
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