'One-size-fits-all' mortgage doesn't work, says A&L

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Mortgage borrowing based solely on a person's income will become a thing of the past Alliance & Leicester (A&L) claims.

The lender which has commissioned a study into lending activities says the use of income multiples is a clumsy way of assessing the level of mortgage payments that people can afford. Meanwhile couples with two incomes are likely to be the biggest beneficiaries of an affordability based approach to mortgage lending, something which A&L argues is becoming more commonplace among lenders. A&L also argues that - based on average incomes – most types of household could potentially afford to put a higher proportion of income towards their mortgage payments than income multiples currently allow. ...

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