The way we assess a BTL application is based on a combination of the Interest Coverage Ratio (ICR) and the BTL reference rate detailed in our lending policy.
Total gross annual income includes all income received, i.e. all annual gross rental income from existing properties and the new BTL property, plus any other earned or unearned annual gross income. For rental income please add the figure into the ‘Other sources of income – Gross rental income’ field and use the actual figure of rent received/expected, not the figure shown on the SA302.
Underwriters will always require evidence of all income for applicants whose income is under £40,000 (We reserve the right to request proof of income where applicants earn £40,000 or more).
Where the applicant(s) has further BTL properties in the background we will require the BTL portfolio form to be completed, found on our website under Godiva forms.
Where each applicant individually has a total gross annual income below £40,000 an ICR of 125% will be applied. And where any applicant has a total gross annual income of £40,000 or above, or declares they are a higher or additional rate tax payer, an ICR of 140% will be applied.
If you have any questions on how to complete a BTL application under the new ICR rules, please contact your BDM or phone us on 0800 121 7788 (selecting option 2).
