Guide to Property Finance

Changes to mortgage applications

In 2014, the rules surrounding mortgage applications changed after the Mortgage Market Review. This mainly affected basic mortgages but the rules also apply across a range of products. 

The changes made the application process much more rigorous in a bid to make sure banks only lend to people who can afford the repayments.

Here's what you need to know:

  • You’ll need to provide proof: The new rules will require much more detailed proof of how much you earn and other financial commitments than was needed previously
  • You’ll be asked questions about other debts: This will include any loans you have as well as sums owed on credit cards and student loan repayments
  • You’ll be stress tested: Banks will need to be satisfied that you could handle a rise in interest rates of around three per cent in the first five years, or a change from fixed to variable rates
  • The rules are tougher: Mortgage lenders can be fined for unsuitable lending so it has become tougher to get a mortgage. This means fewer lenders will lend more than 4.5 times your yearly income
  • Get your paperwork ready: You’ll need to provide a lot more paperwork including three months’ worth of bank statements
  • Interviews can be longer: Interviews to get a mortgage can now take around two hours
  • No more self-certification: Self-certification mortgages, where borrowers were able to confirm their own income without checks, have been officially banned