Banks and Building Societies are continuing to tighten the purse strings and reduce their exposure to risk.

By cherry picking only the most suitable customers who neatly fit their strict criteria mortgage lenders are trying to safeguard their future and improve their own creditworthiness.

Abbey are making it tougher for applicants by assessing their affordability on a much higher rate than the rate of the mortgage they are applying for.

Despite having a headline fixed rate mortgage offering of just 3.99% for two years, any applicants will have their ability to repay the mortgage based on a rate of 7%.

If applicants can’t afford a mortgage at 7%, they can’t get a rate of 3.99%.

This makes some sense when considering tracker and variable rate mortgages because despite rates being low at the moment there is no way of knowing what they will be in the future.

Arguably because after a fixed rate mortgage offer ends the borrower will revert to the lenders standard variable rate it’s important to know they will be able to afford it.

Once again because the future is uncertain at the moment it’s impossible to tell what choices a borrower will have two years from now and what rates will be available.