New Car : Buying a car on finance could have an impact on how much a bank will lend you on a mortgage – and new research has revealed by how much.A PCP deal will be factored into your affordability, like any other regular financial commitment, when applying for a new mortgage or remortgaging.
This is important because it impacts the amount the borrower can afford to pay back on their mortgage each month.Now Coventry Building Society has calculated how much more each model of car could set someone’s borrowing power back by.On a 2025 plate Ford Puma, which
became the UK’s most popular car in 2024, it said a sole homebuyer on the average income could cut their maximum mortgage borrowing by £18,423 by taking out a finance arrangement.Based on the average affordability assessment taken from across the 10 largest lenders in the UK.
For new homebuyers it could mean saying goodbye to an extra bedroom or picking somewhere a little smaller. Coventry’s sum is based on a £345-per-month deal for a Ford Puma for 36 months – a newly available offer listed on Ford’s website.According to Coventry’s analysis, that means joint buyers earning the average salary could borrow £13,205 less if they both had an extra £345 outgoing on their own car.
It would mean a monthly PCP payment of about £397 to drive a new Kia Sportage – the UK’s second most popular car last year.This could affect maximum mortgage borrowing by an amount equivalent to £24,548 for single homebuyers, and £20,611 for joint homebuyers (assuming both had a similar car payment), Coventry said.
People hoping to have to buy a property this year need to think carefully about the long-term implications of a taking a car finance deal, the building society has warned.The amount that anyone can borrow on a mortgage is, after all insiatable, constrained by lender affordability checks and the reality that most can only borrow up to 4.5 times their gross annual salary.