The importance of affordability when choosing a mortgage

Paul DeMarco, an ESPC Mortgages independent mortgage adviser, discusses how to find an affordable mortgage during the cost-of-living crisis.

There's no denying that the economy is facing a range of challenges but what does this mean if you are getting a mortgage for the first time? 

Buying a home is a long-term financial investment so it’s important to understand your budget. Speak to an independent mortgage adviser to discuss your options. Historically, how much you were able to borrow was set by income multipliers of approximately four to four and a half your income. Nowadays, different lenders will lend different amounts, based on your individual circumstances. 

How much you can borrow is based on your income minus your monthly commitments, such as regular loan repayments, car finance, credit card balances, maintenance and with most providers, childcare costs will be factored in. 

Lenders will also factor in how much deposit you are able to pay. The bigger the deposit, the lower the loan to value which will give you a lower interest rate. 

All of these factors will impact how much you can afford to borrow and repay every month. With interest rates at their highest level now for 15 years, you would be advised to check not just how much you can borrow but how much your potential mortgage repayments will be. 

ESPC Mortgages are here to help 

ESPC Mortgages can help with all aspects of understanding your budget and applying for a mortgage. Give us a call on 0131 253 2920 or email fsenquiries@espc.com  

The initial consultation with an ESPC Mortgages adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £395 (£345 for first-time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.

The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

ESPC (UK) Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is authorised and regulated by the Financial Conduct Authority.

ESPC magazine

This article appeared in the December 2022 issue of the ESPC magazine. Find out more about the ESPC magazine and read the latest issue online.