BTL Hints and Tips from Catherine Kennedy 

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Hints and Tips- Buy to Let Stress Testing 

Following on from my Buy to Let stress test hint and tips for the first half of this year, I thought I would revisit lender stress tests and go over any changes that had been made in the last few months. This article will provide you with the latest figures for lenders on our panel, I hope you find this useful. 

As well as issuing these hints and tips documents, Paradigm have a new helpdesk email contact, providing you with anoter contact route to our tehcnical helpdesk. We endeavour to respond to mail within a two hour period, the email address is below: 

Rental Stress Testing 

125% of 5.5% (2 or 3 year term) or 5% (5 year fixed) or product rates whichever is higher

125% of product rate or reversionary rate, whichever is higher. If rental income is between 125%-150%, an additional stress rate will be undertaken which may be met via other rental or surplus personal income after the debt is taken into account. If over 150%, no stress test applies.

125% at payrate 

145% at 5.5%

125% of payrate or notional rate, notional rates as follows:
5 year fixed rate product- 125% at 4.99% (irrespective of LTV)
LTV <65%- 125% at 4.99%
LTV >65%- 125% at 5.49%

125% of payrate or reversionary rate of 4.99%, whichever is higher 

125% at payrate

125 at 5% up to 75% Ltd Co and standard range
125% at 5.64% on HMO range

5 year fixed - 125% at pay rate for Ltd Co, 145% for Personal applicant
2 and 3 year fixed – 125% of payrate or 5.25% whichever higher for Ltd co, 145% of payrate or 5.25% for personal applicant

LTV <65%- 140% at payrate or 5% whichever higher
LTV >65%- 140% at payrate or 5.5%, whichever higher

130% at 5.19%

125% at payrate or 5.5%, whichever is higher 

Experienced landlords- where blended portfolio is used and exceeds 125% of 5% a rental cover of 110% is used. Where blended portfolio income not used, 125% will be used
Inexperienced landlords- 130% will be applied

125% at 5.74% or BTL rate

125% at 5.5% or payrate, whichever higher

125% at 5.5%

65% LTV- 130% at payrate or 5.54% 
70% LTV- 135% at payrate or 5.54% 

125% at 5.5%

145% at 5.5%

125% of the monthly interest payment or SVR (4.74%) + 1% whichever is the higher

125% of payrate

125% of  5% up to and including 60% LTV, and 5.5% over 60% LTV.

125% at 6%

Fixed rate- 145% (150% HMO) payrate or stress rate
            Flexible rate - 145% (150% HMO) payrate or stress rate +0.5%
          Portfolio over £1M  - 145% (150% HMO) of 5.99%

125% of 5.74% or product rate if higher
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