UK-based building society, Principality, has launched a new affordability model, which can make it easier for borrowers to calculate the maximum size of mortgage that they can afford to repay.
The model will take account of comparatively low interest rates and its flexibility will give first time buyers a better chance of getting on the property ladder.
The calculator, which will be available from October 29, 2007 will employ the affordability model rather than calculating simple income multiples. By looking carefully at an applicant’s income, expenditure and credit history, Principality’s model will ensure that the resulting mortgage offer is tailored to each customer’s unique needs and ability to repay.
Mick McGuire, director of business development at Principality, said: This is good news for borrowers. The model allows responsible borrowers, with good credit histories, to borrow sufficient funds to keep up with the large increases seen in house prices over recent years. It will limit borrowing for those with weak credit histories and less disposable income.