All remortgages without capital raising (£4£) now qualify for a reduced 4.00% affordability rate regardless of the product term and mortgage balance on 31 December 2016.
All purchases and remortgages with capital raising now qualify for a reduced 4.00% affordability rate where a 5 year fixed rate is taken for the whole loan (previously 4.50%).
The 125% rental cover has been removed and instead we’re now using our standard 130%/145% based on income tax bands.
The table below shows you our minimum rental cover at the BTL affordability rate on an interest only basis:
| Application type | Rental cover | Buy to Let affordability rate | ||
| At least one applicant’s income tax band is 20% or less¹ | All applicants’ income tax bands are 40% or 45% | Less than 5 year products | 5 year fixed | |
| Purchase or remortgages with capital raising | 130% | 145% | 5.50% | 4.00%
(no porting) |
| Remortgages without capital raising (£4£) | 4.00% | |||
¹The income tax band selected should take into account profit on rental income for all properties that the applicant will own on completion.
