Homeowners have seen the mortgage market change seemingly irredeemably in the past two years, as lenders batten down the hatches and restrict the availability of deals. However, banks and building societies are more flexible than many borrowers realise.

It is still possible to secure a loan worth up to six times your income, to have your entire bonus considered as part of your salary and to have your application “fast-tracked”.

Here Times Money highlights the lenders that remain the most accommodating and picks out the most competitive deals on the market.

Bonuses

Over the past year banks and building societies have become more cautious about allowing any new applicants to include their expected bonuses or commission income in their total annual salary.

Nationwide Building Society was one of the first lenders to tighten the rules last year, confirming that it would consider only 50 per cent of bonus income. However, other lenders are still happy to accept up to 100 per cent of bonus or commission income, as long as you can provide evidence for the past two or three years.

High street banks are even more flexible than private banks towards bonuses, according to Gary Festa, at HFM Columbus, a wealth manager. “If there is a good pattern going back a few years, there are still plenty of lenders that will accept bonus income. However, if you didn’t get a bonus last year it is unlikely that you will be able to get a deal,” he says.

Woolwich, the Barclays mortgage brand, will accept 100 per cent if you can provide proof of earnings, such as a P60, for the past two years. For borrowers with a large deposit (40 per cent), it is offering the lowest mortgage rate on the market, a lifetime tracker at 1.48 points above the base rate for the first year, equating to a pay rate of 1.98 per cent. The rate rises to 2.49 points above base in the rest of the term. The deal has a £999 fee.

Woolwich also has a lifetime tracker at 2.29 points above base, a pay rate of 2.79 per cent, with a £999 fee, up to a loan-to-value ratio of 70 per cent.

Halifax and Cheltenham & Gloucester, both part of the Lloyds Banking Group, will typically accept 60 per cent of bonus income, although it can vary on a case-by-case basis. Alliance & Leicester and Abbey, both part of the Santander group, along with Northern Rock, the state-owned bank, accept 50 per cent of bonus income.

Income multiples

The Financial Services Authority (FSA), the chief City watchdog, decided last month against capping the amount that any individual would be allowed to borrow.

However, lenders are considerably more cautious today than they were during the height of the housing boom, when some would lend up to eight times a borrower’s income.

Nonetheless, it is still possible to borrow at high multiples of income. Alliance & Leicester, for example, will lend up to six times your income, based on a borrower earning £60,000 with no other credit commitments or dependants.

Woolwich will approve a loan that is five times your annual income, while Northern Rock will lend up to 4.5 times your salary.

The Rock is offering a two-year tracker deal at 2.49 points above base, giving a pay rate of 2.99 per cent, for borrowers with a 25 per cent deposit. The deal has a £495 fee.

David Hollingworth, of London & Country Mortgages, a broker, says: “Most lenders are now using affordability models so what you can borrow will vary depending on your level of disposable income and, most importantly, your credit score.”

Most mortgage lenders have affordability calculators online that indicate the maximum amount that they are willing to lend.

Small deposits

Nationwide Building Society introduced new deals last week that are available for a loan-to-value (LTV) ratio of up to 90 per cent, raising the hopes of first-time buyers and borrowers with small deposits. There were 769 such deals in July 2007, compared with 103 today, according to Moneyfacts.co.uk, the financial website.

Nationwide is offering a two-year tracker at 4.13 points above base, a pay rate of 4.63 per cent, for borrowers with a 10 per cent deposit. It has an £896 fee. The mutual is also offering a two-year fix at 5.98 per cent, with a £396 fee.

A number of other banks and building societies are also offering 90 per cent LTV deals, including Royal Bank of Scotland and Halifax.

Mr Hollingworth says: “Credit scoring will have a big impact on a borrower’s chances of getting approved for a high loan-to-value deal. It is vital to check your credit history and ensure your score is as good as it could be.”

First-time buyers should ensure that there is evidence of previous borrowing on their credit history by taking out a credit card and paying it off in full each month to boost their score. It is also vital to register on the electoral roll and ensure that your personal details are correct.

You can obtain a copy of your credit report for £2 from one of the three credit reference agencies, Experian, Equifax or Callcredit.

Fast-tracking

Lenders have been heavily criticised for trying to speed up the process of approving a mortgage application by not checking the income of borrowers. In 2007 half of the new home loans were given the green light without a check on income. The FSA has proposed since then that all lenders verify the income of every new applicant in the future.

However, it is still possible to have your application “fast-tracked”, meaning that a lender could approve a loan in weeks.

This could be particularly useful if you are buying at auction or have had a previous application rejected by another lender.

Nationwide and Woolwich will consider fast-tracking your application if you are borrowing up to 70 per cent of the value of your property. Northern Rock is offering fast-track applications of up to 50 per cent loan-to-value.

Melanie Bien, the director of Savills Private Finance, another broker, says: “It is still possible for lenders to fast-track your application, but borrowers can’t request that a lender fast-tracks their application, or can a broker ask for this.

“However, brokers will know what sort of applicant would be fast-tracked by a lender and which lenders are most likely to consider this.”

She adds: “Fast-tracking will really work only if the applicant is of good overall quality.”

Case study: “ My bonuses delayed a deal”

John East, 38, works full-time as a heating engineer and collects 60 per cent of his annual salary in bonus payments.

He was able to secure a £99,000 mortgage from Alliance & Leicester to buy a £200,000 two-bedroom bungalow.

His deal is a two-year fix, with an interest rate of 3.99 per cent.

The home needs considerable renovation and Mr East is spending £15,000 to refurbish the rooms and install a new kitchen and bathroom.

He had been saving for the previous six years to build up the 50 per cent deposit that he put down on the house.

“I’ve been working and saving as much as I can over the past few years so that I can afford to buy my own place,” he says.

It took Mr East “months” to secure a deal, which he feared was down to the proportion of bonus income that makes up his salary. “The size of my bonus depends on how much I work, but it is not guaranteed, so I waited a year or two to ensure that there wasn’t going to be a problem.”

He obtained a deal through London & Country Mortgages, a broker.