The Melton introduces tiered buy-to-let ICR calculations

Melton Building Society has revamped its buy-to-let criteria with a tiered approach to its ICR calculation for buy-to-let mortgage applicants.

The changes will see the introduction of a new lower rate for basic rate tax payers.

The new tiers will be 125% for basic rate taxpayers and 145% for higher rate tax payers.

The introduction of the lower band for basic or nil rate tax payers will offer applicants more flexibility when it comes to affordability. For example, based on a mortgage of £150,000, the rental income required previously for basic rate tax payer was £1,376pcm. Under the new tiered approach for a basic rate taxpayer, the rental income required has reduced to £1,186pcm.

Dan Atkinson, head of intermediaries at Melton Building Society, commented: “As a mutual building society established nearly 150 years ago it is within our foundations to seek ways to support good quality homes for our communities.

“With these changes we hope to offer landlords, particularly those in lower tax brackets, the flexibility to borrow the money needed to continue to invest in quality properties that offer tenants safe and secure homes for many years to come.”