Tougher mortgage checks expected for new applicants

People applying for a mortgage are facing tougher affordability checks which delve into their spending habits on outgoings ranging from childcare, travel and clothing to wine clubs and even a flutter on the horses.

The higher hurdles are being put in place as lenders gear up for new rules which come into force on Saturday under the Mortgage Market Review (MMR), which aim to prevent any return to irresponsible lending.

Tougher mortgage checks expected for people applying. Credit: PA

Experts are warning people that they may want to consider reining back on their spending several months before applying for a mortgage, as providers will want to sift through around three months of bank statements "with a fine tooth comb".

The new industry-wide rules mean mortgage providers have to take a much keener interest in an applicant's regular outgoings, which could include what they spend on food, household bills, loans, credit cards and leisure activities, in order to weigh up whether or not they can afford their home loan.