Bad news for buy to let landlords as one of the Uk’s largest lenders The Mortgage works changes its buy to let rental stress rate for 65% to 75% LTV products
This is going to be quite a big blow for most buy to let landlords specially around London and the M25 area because rental yields in relation to loan amounts is very much strained. Unfortunately the mortgage works is following suit with many other lenders within the buy to let sector by limiting its exposure to higher loan to value buy to let properties.
A least the lender has got enough sense to step the various rental calculation in accordance with loan to value. Unlike crudely putting only one stress test calculation figure for all of its products.
Nevertheless, as a lender that is huge for all brokers within the buy to let sector this is a big blow and my worry is other lenders will now start to follow in this direction even more.
| LTV | Existing stress rate | Stress Rate (from 20 Nov) | Rental Cover |
| Up to 65% LTV | 4.99% | 4.99% | 125% |
| 65%-75% LTV | 4.99% | 5.49% | 125% |
| Over 75% LTV | 5.99% | 5.99% | 125% |
The changes will come into force on Thursday 20 November
For more information on the mortgage works buy to let range or any other buy to let mortgage products please call us on 020 7993 2044 or alternatively complete the enquiry form on this page.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.
