Why brokers must look beyond the standard remortgage income cap

Every broker knows that remortgaging isn’t always as simple as a straight swap to a cheaper deal. For many households, life has moved on, incomes have changed, family structures have shifted, and new financial needs have emerged. Yet the mainstream mortgage market still relies heavily on ‘standard’ loan-to-income caps that rarely reflect any deviation from ‘traditional’ lending practices and modern-day affordability - leaving too many capable, and credit-worthy, borrowers underserved by a system built for simpler times.

Consider a client emerging from separation who needs to retain the family home on their sole income, or a recent shift in the main source of household income from employed to self-employed, or a borrower supported by a gifted deposit from relatives, or a household requiring the flexibility of an offset facility. Each of these scenarios involves more flexibility than a rigid 4.5x multiple can capture.

That’s where a specialist offering comes into its own, by applying a broader affordability lens. For example, we do not set a fixed LTI cap on pound-for-pound residential remortgages. Instead, cases are assessed individually, with affordability, financial discipline, and supporting documentation forming the basis of the decision. In the right circumstances, this can stretch to as much as 6.9x income, a vital difference for clients seeking to restructure without overextending borrowing.

Other specialist lenders will have their own quirks when it comes to policy and appetite, but that variety is exactly what makes the advice process so valuable. Brokers who understand how to navigate those subtle differences can unlock options that others might overlook, especially when affordability hinges on multiple income sources, recent credit events or family support.

And they’ll need that expertise. While overall remortgage activity dipped in August, borrower intentions tell a different story. LMS data shows that 45% of borrowers increased their loan size and more than a quarter released equity, indicating that refinancing remains a key part of household financial planning. Two-year fixes accounted for 47% of all remortgages, reflecting borrower preference for flexibility in a volatile rate environment.

The figures also reveal clear regional disparities: the average remortgage loan amount in London stood at £370,227, more than double the £176,365 average elsewhere. Meanwhile, the average previous mortgage term ranged from 67.6 months in East Anglia to nearly 76 months in the North West, a 12% gap that underlines how local market rhythms continue to shape refinancing behaviour.

Perhaps most telling is the shift in adviser sentiment. Stonebridge’s latest survey found that 81% are upbeat about the mortgage market’s outlook over the next 12 months, up sharply from 54% a year earlier. Furthermore, 73% believe they will write more business over the coming year, compared to 62% previously. It’s interesting to consider where this new business might come from, and the answer is increasingly likely to lie in the specialist sector, both for purchase and remortgage, as more households face financial circumstances that don’t fit the mainstream mould.

That’s where the value of manual underwriting and expert advice really comes into its own. Brokers, working in tandem with specialist lenders, can transform what may look like a dead end on paper into a responsible and sustainable solution. Whether that’s through broader affordability assessments, detailed income evaluation, or simply taking the time to understand a borrower’s full financial picture.

Today’s borrowers aren’t just chasing lower rates; they need solutions that reflect the realities of modern life. With mainstream lending caps constraining all too many potential and existing borrowers, advisers who understand how to unlock specialist options are the ones best placed to support their clients’ ongoing housing needs as well as their broader financial picture.