The Mortgage Works reduces affordability stress rate

The Mortgage Works is reducing its stress rate by 0.50% on new buy-to-let applications up to 65% LTV.

The changes apply to both five-year fixed rate terms and like-for-like remortgage across all fixed product terms.

The new stress rate will be 4.00% or pay rate, whichever is higher.

For LTVs above 65% LTV, like-for-like remortgages and five-year fixes will continue to have a stress rate of 4.50%.

There are no changes to the stress rate applied for limited company mortgage applications.

Damian Thompson, director of landlord at The Mortgage Works, said: “These positive changes to our stress rates will serve to boost affordability. They will enable landlords to borrow more with us but, at the same, will ensure that we continue to lend responsibly.”

Jeni Browne, business development director at Mortgage Finance Brokers, commented: “So many landlords have been unable to remortgage or acquire new properties because of the more onerous rental calculations that have been in play on the back of higher interest rates – this has been at a huge cost to the private rental sector. Seeing the UK's largest buy-to-let lender tackle this head on by reducing their rental calculations, thus allowing landlords to borrow more per pound of rental income, will mean that property investors will be able to remortgage, thus accessing better mortgage rates, and get investing once more.”

Last month, The Mortgage Works announced rate reductions of up to 0.30% on selected buy-to-let and limited company products for new and existing customers.