As maxstream said, it looks also to me like the lender is using every tactic to try to reduce their own exposure/risk. It clearly indicates, to me at least, that lenders are also aware that the general consensus is that property prices are still falling.

You can hardly blame them for reducing their own exposure, it's simply a business decision. If you start challenging them, they may simply back out, or delay the application.

If they are indeed manipulating the figurers, remember you gave them those figures, then perhaps you should not havet mentioned even your 'rainy day' savings - if you see what I mean.

Tread carefully, these are uncertain times. Good luck with the purchase.

We've already paid out for the valuation and arrangement. Additionally, my experience tells me that any other lender will only offer us the same amount, plus too many credit searches leaves a nasty footprint on my file. Not too keen to go shopping around.

As said, we are challenging their decision but I was curious to get other peoples feedback on this type of situation.

It's an interesting perspective but it sounds more like they are asking you to put more of your money and less of their money into your house purchase. You should shop around to see what other lenders will offer you.

Depending on where your money is now, my opinion is that you are probably better reducing the mortgage than keeping the savings anyway, subject to having a few thousand for a rainy day.

I am in the middle of a mortgage application and am concerned that the lender is not playing fair.

We have a 17.5% deposit, and our incomes are more than enough to cover the amount we wish to borrow. However, the lender has now reduced the amount they are prepared to lend us on the basis of income and commitments. This appears nonsense. I have done the calculations and have come up with a rather disturbing possibility.

The amount we would now have to put down as deposit, along with the stamp duty and solcitor fees we need to pay would exactly wipe out all our savings!! In itself you may think this is just coincidence. However, the same situation happened to a friend of mine just last month. The bank reduced the amount they would lend him, forcing him to use all his savings as deposit. The irony is, the same bank then lent him 25k unsecured personal loan two weeks later!!

Has anyone else out there had the same thing? Are any brokers coming up against this? And what do the experts make of it? I don't see it as fair that the banks are clawing all our savings, just to reduce their risk, and that's exactly what is looks like they are doing.

I am challenging my lenders decision, and may take it up with the Ombudsman if I do not get a satisfactory repsonse. But your feedback would help greatly. Thanks in anticipation.