In 2014, the Bank of England introduced mortgage affordability checks, to ensure that property buyers did not take on levels of debt that they couldn’t pay back — especially if interest rates increased.
On 20 June 2022, following a review of the current mortgage market, they announced the rule’s withdrawal as of 1 August.
What were mortgage affordability checks all about?
The checks were first introduced after the global financial crisis in 2008, essentially to prevent borrowers from taking on more than they could manage, protect the central banks from increased levels of debt, and tighten up mortgage underwriting standards.
Borrowers had to prove that they could still afford to make their mortgage repayments, even if their mortgage rate increased above their lender’s standard average rate of 3 per cent.
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