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Families 'penalised on mortgages'

Couples without children are being given bigger mortgages than those with a family as the lending criteria applied by banks and building societies is tightened.

More and more lenders are taking into account whether couples have children, factoring in money spent on childcare or school fees, when looking at a possible advance.

Evidence has shown that families can be advanced around 10 per cent less than a couple with no children, with the difference sometimes being as much as 20 per cent.

Sue Anderson, of the Council of Mortgage Lenders, said: "Different lenders have different affordability methods, but it would not be illogical for lenders to proxy the cost of children into their affordability assessment."

Critics have warned that the situation could lead to families being unable to progress up the property ladder, or even be penalised when they try to get a remortgage on their property.

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