Buy to Let Hints & Tips from Catherine Kennedy 

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Hints and Tips- Buy to Let 

This issue of my Hints and Tips will focus on Buy to Let rental calculations. Of late, many lenders have altered their rental stress testing rates, so this article will provide you with the latest figures for lenders on our panel, I hope you find this useful. 
I have been concentrating on issuing Hints and Tips on four main categories that are key issues in our industry,which are as follows: Lending into Retirement, Buy to Let, Affordability and Self-employed mortgage applicants.I would welcome any feedback, particularly if you have had a tricky case agreed and you didn't know a certain Lender could lend on it. These make great examples of hints and tips to share with our members! 

Rental Stress Testing 


2 & 3 year terms- 125% at higher of product rate or 5.50%
5 year term- 125% at higher of product rate of 5%

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 

135% at 5.79% all cases, even if payrate is higher 

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 payrate or nominal rate of 5% up to 80% LTV or reversionary rate whichever is higher

LTV <65%- 125% at payrate or 5% whichever higher
LTV >65%- 125% at payrate or 5.5%, whichever higher

130% at 5.19%

125% at payrate or 5.5%, whichever is higher 

5 year fixed rate- 125% at payrate 
Client with less than 3 properties- 125% at 5%
All other property- 125% at 5% or product rate + 0.35% whichever is higher

125% at 5.99%

125% at 5%

125% at 5.5%

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

125% at 5.5%

125% at payrate or reversion rate of 5% or 5.5%
BBR + 4.5% = 5% and BBR + 5% = 5.5% 

125% of payrate or (4.99%) + 1% whichever is higher 

125% of payrate

Buy to Let affordability rate is 5% up to and including 60% LTV, and 5.5% over 60% LTV. The rent must cover 125% of the mortgage (based on interest only).
Properties must be self financing which means that the rent must cover both 100% of the mortgage payment at the higher of our BTL affordability rate, product rate or SVR (based on the chosen repayment method) and monthly running costs.

25% at 6%

LTV <65% OR 5-10year fixed term- 145% at 4.99%
65% LTV-75% LTV- 145% AT 5.49%

125% at payrate or 5.99% whichever is higher 

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