Think you can’t afford to get on the property ladder? Think again. Thanks to changes in the mortgage market, many so-called mortgage myths are now far from reality. In fact, new research shows that plenty of first-time buyers could secure a mortgage far more easily than they realise.
A recent study by mortgage brokers Alexander Hall found that many aspiring first-time buyers (FTBs) still have outdated ideas about how the mortgage market works. As a result, they assume they’re locked out of home ownership when, in truth, the market has become much more accessible.
Common Mortgage Myths Holding Buyers Back
1. “My deposit isn’t big enough”
One of the most common mortgage myths is that you need a 10% deposit to buy a home. The study revealed that 53% of potential buyers believed this to be the case, while 14% were unsure of the rules.
In reality, it’s possible to get a mortgage deal with just a 5% deposit. The number of low-deposit mortgages has increased significantly, and the choice of 5% deposit options is now at its highest level in 17 years.
If saving for a large deposit has been holding you back, it’s worth speaking to a mortgage adviser about the options now available.
2. “I don’t earn enough”
Another common misconception is around income multiples. The survey found that a third of people thought they could only borrow up to three times their salary. However, this is another outdated mortgage myth.
Today, most banks lend at a ratio of around 4.75 to 5 times income. In fact, the average loan-to-income ratio for first-time buyers is currently 4.08 times income, meaning affordability may be better than you think.
If you dismissed the idea of buying a few years ago, it might be time to revisit your figures and explore how much you could actually borrow now.
3. “I can’t get a mortgage because I’m self-employed”
Many self-employed workers have long believed that getting a mortgage is far harder without a traditional employer to confirm their income. A third of survey respondents thought they needed at least three years of financial accounts before they could even apply.
The truth is that many lenders now accept one or two years of certified accounts from self-employed applicants. While the process can be slightly more complex, it’s no longer the barrier it once was. This mortgage myth often stops talented freelancers, contractors, and small business owners from even trying.
The Mortgage Market Has Moved On
For years, headlines focused on how hard it was for first-time buyers to get on the property ladder. While that may once have been true, the situation has changed considerably. With interest rates gradually easing and lenders relaxing some of their criteria, the mortgage market is now far more open.
If you ran the numbers a few years ago and decided buying wasn’t possible, it’s worth reassessing now. Your income, savings, or self-employment status may work in your favour more than you expect.
At Ensum Brown, we work closely with trusted mortgage brokers who can help you understand your options, separate fact from fiction, and finally move past those lingering mortgage myths.
If you’re hoping to take your first steps into the property market, get in touch with us today.
Know someone who might find this article useful? Share it with them and help them challenge these common mortgage myths.
The information in this article does not constitute financial advice.
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