Coventry Building Society says that people with car finance are now eligible to borrow thousands more on their home loans than they could six months ago.
The move comes as the new ’75’ car registrations are launched today and following looser affordability assessments driven by updated Financial Conduct Authority guidance.
The mutual says in March, a single buyer – earning the average UK salary – would see their mortgage borrowing cut by over £18,000 if they had a £345 car payment.
But now that same car payment takes just £5,000 off their maximum borrowing, allowing them to borrow nearly £13,000 extra for their home. These figures are based on an average of updated top 10 affordability models, says the mutual.
The lender adds that joint buyers – both earning the average salary – would have seen their maximum borrowing cut by over £13,000 in March if they each had a £345 car loan. Their borrowing will now be reduced by £5,677.
Coventry Building Society head of intermediary relationships Jonathan Stinton says the change is “a big shift, and it gives borrowers more flexibility to balance lifestyle choices like car ownership with their homebuying goals.
“That said, a car payment still affects how much clients can borrow—it’s just not the deal-breaker it used to be.
“Brokers can help clients navigate these changes to make more informed decisions, especially when remortgaging or adjusting terms.”
