Accord improves buy-to-let rental calculations

Accord Mortgages has made enhancements to its buy-to-let offering, designed to help landlords affected by the current higher interest rate environment.

The intermediary-only lender has reduced the interest coverage ratio rate (ICRR), the stress rate applied to buy-to-let affordability calculations, to make its products accessible to more landlords.

Where landlords are remortgaging on a like-for-like basis, the ICRR will drop to 6.5%, or product rate +1% (whichever is higher).

Where landlords are capital raising, Accord is reducing the ICRR to 6.5% for products with an initial term of equal to, or greater than five years, or product rate +1% (whichever is higher).

The ICRR also reduces to 7.5% for products with an initial term of less than five years, or product rate +2% (whichever is higher).

Accord is also simplifying its interest coverage ratio (ICR). Moving forwards, the calculation applied will be 125% for all basic rate taxpayers and 145% for all higher rate taxpayers.

The changes apply to all new applications.

Nicola Alvarez, senior manager for new propositions at Accord Mortgages, said: “As a buy-to-let lender, not just a lender that does buy-to-let, we’re constantly looking for ways to support brokers and their landlord clients.

“We hope these latest positive changes to our criteria will help more landlords to continue servicing the buy-to-let market, providing much sought-after private rented housing.”