Recently, however, some lenders have adopted a different approach, under the banner of “affordability”. The new concept is that the amount of a mortgage offered should depend on a deeper appreciation of the would-be borrower’s financial status, taking into account such things as monthly expenses, the level of existing debts as well, of course, as the base salary earned. Credit histories are also considered.

It is argued that, using an affordability-style appraisal, low earners with solid credit histories are usually able to obtain mortgages of a significantly higher value than was common with the more traditional salary-based approach.

Affordability criteria are based more on a person’s individual circumstances and so can often be beneficial. This is not always the case, however. In fact, in some cases, the use of affordability criteria may result in a less generous offer than more traditional lending practices. For example, having children tends to count strongly against a would-be borrower on the affordability measure because raising children is seen as a constant financial drain.