Coventry for intermediaries enhances buy-to-let affordability

Coventry for intermediaries has enhanced affordability for landlords by reducing the reference rates for buy-to-let applications.

Using the new calculations, a basic rate taxpayer receiving a rental income of £900 and opting for a five-year fixed rate, could borrow £181,895 – previously £157,091 - subject to the 75% loan to value limit.

The reference rate for five-year fixed rate purchase and remortgage applications is now 4.75%, down from 5.5%, or product pay rate - whichever is higher.

For two-year fixed rate remortgages with no additional borrowing, the rate has reduced from 5.5% to 5%, or product pay rate.

For two-year fixed rate purchases and remortgages with additional borrowing, the reference rate is down to 6% or product pay rate +2%.

The minimum rental income required is 125% or 145% of the mortgage payments, based on the above applicable reference rate.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Landlords help provide homes for those who are waiting to buy or simply not in a position to buy. Our affordability changes should help make it easier for new and existing landlords to finance their rental properties and help keep up with tenant demand.

“We try to make it as easy as possible easy for brokers to help their landlord clients, which is why we don’t ask for a minimum income – we simply look at rental income. Our buy-to-let calculator helps brokers easily see how much their landlord clients can borrow, and these new changes to our reference rate will likely mean many of those clients can borrow more if they need to.”