Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Borrowers Increasingly Use Eased Affordability Rules to Remortgage

More UK borrowers are using modified affordability assessments (MAAs) to remortgage with new lenders, according to data obtained by mortgage network Stonebridge. The number of product transfers using MAAs has dropped significantly, while remortgages using these rules have risen.

Stonebridge acquired the data through a Freedom of Information request to the Financial Conduct Authority (FCA). The findings show that in Q1, MAAs were used for just 100 product transfers, an 81.8% decrease from 550 in the previous year. In contrast, the number of MAAs used for remortgages increased by 30.2% year-on-year to 5,828. The share of borrowers using MAAs to switch lenders rose from 87.7% to 98.3%.

The share of MAA product transfers fell from 12.3% in Q1 last year to 1.7% this year. The number of lenders using MAAs also decreased, from 12 in the second half of last year to eight in Q1.

The FCA has permitted lenders to use MAAs since July last year, specifically when borrowers want to reduce their mortgage term or when a mortgage with a new lender is cheaper. The data also indicated that borrowers were refinancing at lower rates, with external MAA remortgage rates averaging 3.92% in Q1, which is 0.73 percentage points lower. The average loan amount for these remortgages was £194,999, 141% larger than previously recorded figures.

For UK letting agents and inventory clerks, these trends may signal increased mobility among tenants and homeowners, as more borrowers are able to switch lenders and potentially secure better mortgage deals under the eased affordability rules.