Mortgages: Students
The question
To ask the Chancellor of the Exchequer, what steps she is taking to assist people with student debt to gain access to a mortgage.
Answered by Lucy Rigby
The Government is committed to making home ownership more accessible by supporting first-time buyers, and welcomes changes made last year to support homeowners. The FCA clarifications to their affordability testing rules have been adopted by 85% of the market and should allow customers to borrow around 10% more on the same income.
Additional flexibility from the Bank of England in relation to their loan-to-income rules are also allowing more customers to access larger mortgages in relation to their incomes. The Bank of England estimates that this change provide capacity for lenders to support up to 36,000 additional first-time buyers in the first year.
The UK also benefits from a competitive mortgage market that offers various low deposit products; prospective buyers are encouraged to shop around and speak to a mortgage broker to find the best possible product for their circumstances.
As a Government, we recognise the impact that previous Government terms can have on graduates’ finances. The government is capping the maximum interest rates on Plan 2 and 3 student loans at 6% from 1 September, for the 2026/27 academic year, delivering stability and protections for graduates from escalating student loan interest. We will continue to keep the terms of the student loan system under review to ensure that it is sustainable and fair for both students and taxpayers.
Verbatim has judged this answer against the question that was actually asked — answered, partly answered, or evaded. Sign in to see the verdict →