PEOPLE applying for a mortgage face more probing questions into their spending habits from next month.

Toughened industry-wide rules means that from April 26, mortgage providers will take a keener interest in' outgoings such as childcare, clothes, phone bills, hobbies, travel and season tickets, in order to work out whether or not they can afford the loan.

Experts suggested the new mortgage market review (MMR) rules could also lead to some lenders tweaking their rates upwards in order to manage a slower flow of applicants while they get to grips with the changes, while some borrowers could be offered smaller loans than they were expecting.

The crackdown aims to ensure there is no return to irresponsible lending.

The rules will also mean lenders have to apply a "stress test", to ensure the loan would still be affordable if interest rates rose pushing up borrowers' regular repayments.

Paul Smee, director general of the Council of Mortgage Lenders (CML), said the changes would bring about "the largest change to how the mortgage market works for a decade The industry has shown that it is ready, and we anticipate a smooth transition into the new framework."