The Money Advice Service explains: “In the past, mortgage lenders based the amount you could borrow mainly on a multiple of your income. This is known as the loan-to-income ratio.
“For example, if your annual income was £50,000, you might have been able to borrow three to five times this amount, giving you a mortgage of up to £250,000.
“Now, when you apply for a mortgage, the lender will cap the loan-to-income ratio at four-and-a-half times your income.”
Lenders carry out thorough assessments on people applying for a mortgage, to see if they will be able to afford the repayments every month.