Lenders do not stop lending when the economy looks unsettled. They quietly reprice risk instead. High loan to value deals thin out, affordability calculators get retuned, and any part of your income that looks unpredictable gets a harder look. The market keeps working. It just gets narrower at the edges.
So the direct answer to the question we get asked most in periods like this is that in most cases you can still get a mortgage. You may need a slightly bigger deposit than a calmer market would have asked for, and you may borrow a little less against the same salary. Neither of those is the same as being locked out.
What follows is what actually moves inside a lender when confidence dips, and which parts of it you can do something about.
The deposit is the fastest lever a lender has. Someone borrowing 95% of a property's value has almost no equity cushion, so a modest fall in prices puts that loan close to underwater and the lender carries the consequence. Trim exposure at the very top of the range and you have cut your worst case without turning away the bulk of your business.
In practice it arrives in stages. First 95% products get withdrawn or restricted to certain property types. Then the price gap between 90% and 85% widens by more than the extra risk really justifies. Then criteria at high loan to value get fussier: new build flats excluded, minimum income floors introduced, tighter rules on gifted deposits.
When confidence returns, those products come back. Usually sooner than people expect, which is worth holding onto if you are tempted to shelve your plans for two years.
Lenders price in bands, commonly 60%, 75%, 80%, 85%, 90% and 95%. Land at 90.4% and you get priced as a 95% borrower, which can mean a noticeably higher rate for the whole of your fixed period. Find another couple of thousand pounds, drop under 90%, and the pricing changes immediately.
We see this catch people out constantly, usually because they worked from an asking price rather than the figure the surveyor actually put on the property. Run your numbers through a loan to value calculator before you commit, and check where you sit relative to the nearest band. A small extra deposit, or a slightly lower agreed price, is often worth more than hunting for a better rate.
Two separate tests decide what you can borrow. The first is an income multiple, usually around 4.5 times income, with some lenders stretching to 5 or 5.5 times for higher earners or particular professions. The second is the affordability assessment, and that is where most of the variation lives.
Rules from the Financial Conduct Authority require a lender to check you could still afford the payments if interest rates rose during your term. So the lender does not test you against the rate you have been quoted. It tests you against a materially higher one, commonly the rate you would revert to when your fixed period ends, plus a margin on top of that.
The stress rate is the quiet dial. Nudge it up by half a percent, add a little to the assumed cost of running a household, and the maximum loan on the same payslips falls by thousands. No product gets withdrawn. No announcement is made. Borrowing capacity has simply tightened across the market.
Rates themselves feed into it. As of mid 2026 the Bank of England base rate is 3.75%, held at the end of July for the fifth meeting running, with three of the nine MPC members voting to raise it to 4%. CPI inflation, published by the Office for National Statistics, sits at 2.6%, above the 2% target. Through 2025 the market was pricing in cuts. The live question now is whether the next move is up. Nobody knows, and any adviser who tells you otherwise is guessing.
If your income is a flat monthly salary from one employer, a cautious market barely changes your paperwork. If your income varies, it changes a great deal.
The reason is evidence, not prejudice. Assessing a salaried applicant means reading a contract about the future. Assessing self employed income means reading accounts about the past and forming a judgement about whether they repeat. When the economy looks uncertain, lenders trust that judgement less, so they build in more caution.
The tightening tends to look like this. Two years of accounts become three. Where a lender would have used your latest year's profit, it averages the last two, or takes the lower of them. Bonus and commission get discounted, often to half the average. Overtime that was counted in full gets counted at a fraction. Day rate contractors find fewer lenders willing to work from the contract rather than filed accounts.
That last point does more work than people expect. Underwriters are not looking for a flawless trading history. They are looking for a story that holds together.
Every extra pound of deposit does two jobs at once. It moves you towards a cheaper loan to value band, and it reduces the loan the affordability test has to cover. If a lender's calculator leaves you £8,000 short, another £8,000 of deposit solves the same problem from the other direction. Gifted deposits from family are widely accepted, though your lender will want a signed letter confirming the money is a gift, with no repayment expected and no stake in the property.
Check all three main credit reference agencies, not just one. Lenders do not all use the same agency and the files rarely match. Look for old addresses, closed accounts still showing as open, and anything you do not recognise. Then leave the file alone for a few months: no new credit applications, no short term borrowing, nothing that adds a fresh search footprint. Our guide to improving your credit score before a mortgage application goes through the detail.
Committed monthly payments come straight off your borrowing capacity, and the monthly figure matters more than the balance. A £6,000 car finance agreement costing £280 a month can reduce your maximum mortgage by considerably more than clearing £6,000 from a credit card would, because the lender reads the commitment rather than the debt. If you are deciding what to pay off before applying, target the highest monthly payment relative to its balance rather than the largest total. Our explanation of how your debt to income ratio is assessed covers the arithmetic.
Applications stall on missing paperwork far more often than they fail on criteria. Have your last three months of payslips, three months of bank statements in a format lenders accept, your latest P60 and proof of deposit ready before you start. If your statements show gambling transactions, regular unarranged overdraft use, or payments to a debt management firm, expect a question and have the answer prepared.
The instinct in an uncertain market is to sit still. Sometimes that is right. Often it quietly costs money.
Roughly 1.8 million fixed rate deals expire during 2026, many of them five year fixes taken at under 2% in 2021. If yours is one of them and you do nothing, you drop onto your lender's standard variable rate, which typically sits somewhere between 6% and 7%. At the time of writing the best two year fixes start around 4.3% and five year fixes around 4.4%. Sitting on a standard variable rate hoping for something better in six months is an expensive bet, and it is still a bet.
You can usually secure a new deal up to six months before your current one ends, and most offers can be swapped if something better appears before completion. That gives you a rate held in reserve with the option to improve on it.
A declined application is rarely a judgement on you. It is a judgement on the fit between your circumstances and one lender's criteria in one particular week.
In a settled market, lender criteria are broadly comparable and going straight to your own bank costs you a little on rate. In an unsettled one, the differences between lenders become the whole game. One averages two years of self employed profit while another uses the latest year. One counts half your bonus, another counts all of it. One overlooks a satisfied default from four years ago, another declines on sight.
None of that is published in a form you can compare from the outside. It changes without notice, sometimes week to week, and no lender advertises that it has just quietly relaxed a rule. Tracking those moves is part of a broker's job, which is a different exercise from comparing headline rates. There is more on that in our piece on going direct versus using a broker.
The practical benefit is placement. Putting your case to the right lender first time avoids a decline, and a decline leaves a search footprint on your credit file that the next lender can see.
Most people who assume they will be turned down have never had their case properly looked at. Sometimes the answer genuinely is not yet, and if so it is far better to know which specific thing needs fixing and roughly how long that takes.
We look at your income, your credit file and your deposit, tell you which lenders fit your circumstances and which do not, and give you a realistic figure to plan around. If the sensible answer is to wait six months and build your deposit, we will say that too. Get in touch with our advisers and we will go through where you actually stand.
