Mortgage affordability reached a high for the year in September, with the average maximum loan size available up by nearly 10% compared to the start of 2021.

Analysis of real cases processed through the Mortgage Broker Tools (MBT) research platform shows that the maximum loan size available to an average customer was £254,821 in September, compared to £234,224 in January.

This increase was primarily driven by improved options for first-time buyers. According to the MBT Affordability Index, the maximum loan size available to an average first-time buyer was £276,060 in September, which is up from £230,555 in January.

Tanya Toumadj, CEO at Mortgage Broker Tools, said: “It’s a very competitive lender landscape at the moment and that means more options for borrowers. Cutting rates is one way for lenders to get an edge, but it’s not the only way and we’ve seen improved choice at higher LTVs and lenders making changes to their affordability calculators to become more competitive.

“At Mortgage Broker Tools, we’ve also seen the introduction of new ways for first-time buyers to enhance their affordability options, with results that show the benefits of combining an equity loan with a first charge mortgage, and this has certainly helped to boost the average loan size available to this group of customers.

“The latest MBT Affordability Index shows that even though the maximum loan size available is at its highest point this year, a quarter of cases are still deemed to be unaffordable by lenders, so it’s really important that brokers carry out thorough research amongst as many providers as possible. Our residential panel, for example, features 44 lenders, which is nearly a third more than its nearest competitor.

“This difference in panel size makes a tangible difference to how much a client is able to borrow – in fact, we have calculated that by researching the additional lenders we offer, an average client would be able to borrow an extra £38,000. And this could be the difference in helping a client to achieve their objectives or letting them down.”