Fewer borrowers opting for big mortgages - even though more banks are letting them

Fewer households are taking out mortgages that are far bigger than their incomes, despite banks relaxing rules to allow more of them to do so.

Earlier this year, multiple mortgage lenders eased their rules to allow borrowers to take out more money, reducing their stress rates , which are used to calculate if a household could afford repayments if mortgage costs were to rise.

Halifax , for instance, lowered the stress rate it uses, meaning typical applicants could borrow up to £38,000 more.

But figures produced by the Bank of England actually show that the proportion of mortgages lent to those with high loan-to-income (LTI) ratios dropped in the second quarter of the year.

Experts say it shows that households are being naturally cautious about borrowing large amounts of money.

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