Leeds launches unique proposition to buy-to-let market
Leeds Building has announced new criteria following the PRA’s changes to underwriting standards for buy-to-let mortgages.
The changes, which come into effect on 1 January 2017, are designed to support this important segment of the market.
Richard Fearon, chief commercial officer said:
“We believe the combination of an income coverage ratio of 140%, a specific and lower stress test rate for re-mortgages, our supporting criteria and market expertise brings a unique proposition to the buy-to-let market.”
Summary of changes:
– Income coverage ratio for BTL and holiday let mortgages will go up to 140%, from 125%.
– ICR assessed taking into account mortgage interest tax relief.
– Affordability stress test rate is 5.50% for purchase and capital raising re-mortgages.
– Affordability stress test rate where there is no additional borrowing is 5.00%.
– An ICR assessment is not required for existing Leeds Building Society BTL customers who have come to the end of their existing deal and there is no additional borrowing.
– Removed the minimum income requirement (previously £25k pa or £40k for joint applicants).
– Available up to 70% LTV
Richard added:
“Around 60% of BTL advances are re-mortgages and our affordability stress test rate where there is no additional borrowing is 5.00%, which will support a significant number of landlords with existing properties looking to refinance their portfolio.”
