"We’ve seen flexibility from those who are accepting customers on furlough and we’ve helped a number of customers in this position to secure mortgages."
Existing homeowners utilised the Covid-19 lockdown period to remortgage onto a better rate, according to new figures from online broker Trussle.
Its data shows that the total number of mortgage enquiries dropped by 37% between March to April. Within this, first-time buyer applications fell by 35% year-on-year during April and submissions between March and April were down by 53%.
In contrast, Trussle saw a huge 110% year-on-year increase in remortgage applications, suggesting current homeowners are looking to save money with better rates.
Miles Robinson, head of mortgages at Trussle, commented: “As the coronavirus crisis continues to impact people’s livelihoods, those who have been furloughed are naturally likely to be concerned about their mortgage applications.
"During these difficult times, many lenders will only consider 80% of a furloughed customer’s income in affordability calculations, provided that the applicant has confirmation that they’ll be going back to work. As there’s a monthly cap of 80% of salary paid up to £2,500 for furloughed workers, people earning more than this will be impacted more significantly. Many lenders are also hesitant to consider overtime and bonuses at this point in time as it is certainly not guaranteed income.
"While other lenders won’t accept furloughed customers at all, we’ve seen flexibility from those who are accepting customers on furlough and we’ve helped a number of customers in this position to secure mortgages. The criteria has been changing frequently during these times, so anyone who has been furloughed should seek professional mortgage advice.”