News
Personal income now accepted for buy-to-let
01 February 2018
To help more of your clients get the loan amount they need we allow clients to include personal income in the affordability test*. The rental income must cover 125% of the mortgage interest payment, calculated at a notional rate of 5.50%, with personal income being considered to cover the difference up to 145%.
One affordability calculator
To keep things simple, there’s one affordability calculator so you can check the loan amount we’d offer your client. Continue to declare all of your client’s credit commitments and our calculator will automatically take personal income into consideration during the affordability assessment, where the rental income does not meet 145% of the mortgage interest payment.
Our rental cover stress tests
We use the following rental cover stress tests which reflect the recent increase to our BTL Variable Rate:
Buy-to-let standard affordability
|
Notional stressed rate |
|
Application type |
Rental income |
5 year fixed products |
All other products |
|
Purchase |
145% | 5.24% | 5.50% |
|---|---|---|---|
|
Remortgage with additional borrowing |
145% | 5.24% | 5.50% |
|
Remortgage straight balance swap |
125% | 5.99% | 5.99% |
Personal income affordability
|
Rental cover |
Notional stressed rate |
|---|
|
Application type and product |
Min rental income |
Personal income between |
All products |
|---|---|---|---|
|
All buy-to-let applications and products
|
125% | 125%-145% | 5.50% |
There is no minimum loan size and we allow a maximum loan size of £1million on any one property up to 75% LTV. The minimum property value we accept is £50,000.
Our handy Sales Aid has some examples showing when personal income will and won’t be used.
Please contact your dedicated Business Development Manager with any queries and they will be happy to help.
* Personal income is defined as the customer’s net monthly income less any outgoings.
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