Important changes to our Buy to Let policy

02 October 2017

On Monday 2 October we made some changes to our Buy to Let lending policy.

1. Personal income

We continue to use rental income to assess affordability, which must cover 145% of the mortgage payment calculation at interest rate stress.

However, we have great news for your landlords. If there is a rental shortfall between 125% and 145%, we will now accept their personal income to cover this, helping more of your clients get the loan amount they need.

2. Interest rate stress

We have changed our interest rate stress for 5 Year Fixed Rate products to 4.99%.

For all other products, the interest rate stress will continue to be calculated on the current notional rate of 5.50%.

3. Portfolio landlords

Under the Prudential Regulation Authority’s (PRA) new rules, if your client has four or more mortgaged Buy to Let properties they will be defined as a portfolio landlord.

We no longer accept landlords with more than three mortgaged Buy to Let properties on completion of the new transaction. For joint applications, this includes mortgages held together or separately.

This change forms part of the new PRA minimum standards being made to Buy to Let mortgage underwriting policy.

Existing Virgin Money Buy to Let customers with four or more mortgaged Buy to Let properties can renew their mortgage with us, but the option to apply for additional borrowing will not be available.

What else do you need to know?

The maximum portfolio limit of £2 million with Virgin Money remains unchanged.

We will continue to review our Buy to Let lending policy to ensure we meet your clients’ needs and will always keep you updated with any changes.

For full details of our current lending policy, visit our A-Z lending policy or download our A-Z Lending Policy App, and get instant easy access to our policy on the go.

For any other queries you may have, your dedicated Business Development Manager will be happy to help.