In response to changes to Mortgage Interest Relief for buy-to-let landlords, we have introduced an income affordability assessment in addition to the rental cover calculation. We will request details of the applicant’s personal income, financial commitments, other committed expenditure (as with a residential application) in addition to their current and expected rental income.

To assess a buy-to-let applicant’s affordability, we first look to see if the rent they expect from the property meets our rental cover calculation of 5.5% x 145%, subject to a maximum loan to income of 4.99 times income and a maximum LTV of 75% and the income affordability assessment. If an applicant meets these criteria we can proceed with the application.

If the rent expected from the property does not meet the 5.5% x 145% rental cover calculation, we can take into account any free personal income the applicant may have to make up the shortfall, as long as the expected rent meets a minimum rental cover calculation of 5.5% x 125%.

If you would like to discuss how we can help your buy-to-let customers, then please call your BDM. For more information, refer to our new Buy-to-let guide.