![Thousands could miss out on mortgages due to rising energy costs Energy Bill](https://barcadiapublications.fra1.cdn.digitaloceanspaces.com/financial-reporter/img/article/energy_bill-19057.jpg?v=26bcd5abf3ca441f0cffe9bce2b731b3)
Data analysis by Mortgage Broker Tools has revealed that 75% of mortgage enquiries were affordable in August, but with Ofgem saying that annual energy bills are expected to go up by £1,578 for the average household, this increased cost could reduce the average loan size available to mortgage borrowers by £7,125.
The impact of this reduction could mean that thousands of prospective mortgage customers could miss out on being able to access the loan size they want, which may have otherwise been considered to be affordable.
Tanya Toumadj, CEO at Mortgage Broker Tools, said: “The cost-of-living crisis is impacting everyone in a number of ways, not just energy prices. But the rising price of energy is certainly one of the most significant factors contributing to inflation and these additional costs need to be considered by lenders as part of their affordability assessments.
“Analysis of our data, which is based on tens of thousands of mortgage enquiries processed through MBT Affordability, has found that increasing energy costs alone could make a significant difference to mortgage affordability. In fact, more than 10% of mortgage enquiries that may otherwise have been considered to be affordable, could miss out on the loan size requested.
“The good news is that mortgage lenders are taking an increasingly data-driven approach to affordability, enabling them to offer loan sizes that are more appropriate to individual circumstances. Often the best lender for affordability may not be one of the first to be considered, so thorough research of the market is needed. For customers, the best way to do this is by speaking to a mortgage broker and, for brokers, the best way is to use technology to help them understand the available options from a wide selection of lenders. At MBT Affordability, we provide brokers with the largest panel in the market, ensuring they maximise their opportunity to secure the most suitable deal for their clients.”