In the past mortgage lenders have tried to make sure that borrowers will be able to afford the repayments on the loans they take out. This has been achieved by setting limits on the amount borrowed.

A single person could expect to borrow 3 times their income and a couple 2.5 times their joint income.

However these days lenders often exceed these traditional limits. This may happen if they are especially keen to lend money or if they believe the borrower will have a greater income in the near future.

Fixed rate mortgage deals have been particularly popular both for homebuyers and for re-mortgages. The monthly survey carried out by the Council of Mortgage Lenders (CML) showed that 71% of mortgage deals in April took advantage of fixed-rate products. This was an increase of 17% on figures for the same period last year.

The CML suggested that this may be due to borrowers preferring to know that short-term increases in interest rates will not affect the repayments on their loans.

Return to News index