What is affordability?

We work out if you can afford a mortgage by assessing your lifestyle and finances. This helps us to make sure we don’t lend irresponsibly. The result of this assessment is your affordability.

When you apply for a mortgage, all lenders in the UK must:
Assess the size of monthly payments you can afford. We consider personal and living costs as well as your income.
Look ahead and ‘stress test’ your ability to repay the mortgage. This includes the effect of interest rate rises or a change to your circumstances.
Cap the loan-to-income ratio for the majority (85%) of their lending at no more than four and a half times your income. 
(For example, if your combined household income is £50,000, a mortgage provider may lend up to £225,000 to you).

Our lending criteria

There are several factors you should consider when starting a mortgage application. These are ‘lending criteria’ and you can learn more about them on our lending criteria page.

How do we assess affordability?

We look at 4 things to assess your affordability.
Number 1

Evidence of your income and outgoings

When you make your application, we’ll need evidence of your regular income and outgoings. We don’t include foreign income or assets when calculating how much we can lend to you.
Number 2

Credit check

We conduct a credit check on all full mortgage applications. Many things impact your credit score, including failed, late, or missed repayments, County Court Judgements (CCJs) and bankruptcy. You can find out more about credit checks by visiting Equifax.
Number 3

Household and personal details

We use standardised UK household expenditure figures when assessing your mortgage affordability. We also factor in your age and the proposed term of the mortgage. We offer mortgages up to the age of 80 on a repayment mortgage and 70 on interest only.
Number 4

Further checks

We check against data supplied by other agencies and lenders. Information is shared as a safeguard and to ensure we lend responsibly.

Improving your affordability

There are certain actions you can take to improve your affordability:
Reduce the size of your loan
Mortgage deals with a higher Loan to Value (LTV) usually come with higher interest rates and repayment. If you can reduce the amount you are borrowing you can improve your affordability. This can mean taking out a smaller loan or increasing your deposit.
Your lifestyle
By considering your lifestyle in the months before application, you can ensure you have healthy bank statements. This shows positive cash management as well as savings.
We look at your bank statements and proof of income for up to 6 months before application. If you’re in full-time employment we need you to have been in your post for at least 3 months.
If you’re self-employed, we need up to 2 years of business accounts records to assess affordability. We may also need bank statements and income tax paid. Please read our guidance for self-employed applicants on our lending criteria page.

Other affordability considerations

Ground rent and service charges
If the property has a ground rent or service charge, we will need to know what this is on your application form.
Changing circumstances
Changing circumstances can affect your affordability in either direction.
New build properties
If your new property is a new build this will also affect the amount YBS, and other providers may be willing to lend. 
See our lending criteria page for more information.
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