Molo reduces stress rates across buy-to-let range

Buy-to-let lender, Molo Finance, has announced reductions in its buy-to-let stress rates across its two-year fixed and tracker products.

Molo says the changes will support landlords looking for shorter-term fixed rate or tracker products with a view to benefitting from potential future rate decreases, while still achieving the levels of leverage required.

Two-year fixed rates will now be stressed at the higher of pay rate, follow-on rate, or 5.50%, while tracker products will be stressed at the higher of pay rate plus 2%, follow-on rate, or 5.50%.

The changes will benefit borrowers – both in the UK and abroad – looking to purchase a property or remortgage, complementing the fixed rate reductions announced last month.

For UK residents, two-year fixed product stress rates have reduced from 9.94% to 7.94%, increasing borrower affordability by 20%, while tracker stress rates are down from 9.94% to 8.39-9.49%, increasing affordability by up to 16%.

For non-UK residents, two-year fixed product stress rates are reducing from 10.99% to 8.99%, increasing affordability by 18%, while tracker product stress rates have reduced from 10.99% to
10.49-10.99%, increasing affordability by up to 5%.

Molo’s VP of strategy Mark Michaelides, commented: “Affordability has been one of the biggest challenges facing landlords over the past 12 months, so we’re delighted to announce a recalibration of our stress test to reflect current market conditions and help support the private rental market. We will continue to lend responsibly, providing confidence to brokers and borrowers alike.”