Changes are applicable to single dwellings and HMOs for all purchase and remortgage applications
Specialist lender Precise Mortgages has simplified the minimum interest cover ratio (ICR) for personal ownership applications and improved the assessment of buy-to-let affordability on short-term fixed rates and variable rate trackers.
The lender, which is part of the OSB Group, said minimum ICR for higher rate and additional rate taxpayers will now be 140%. Previously, it was 145% for higher rate and 160% for additional rate.
In addition, the stress rate for short-term fixed rates and variable rate trackers would now be assessed at pay rate plus 1.55%, with a minimum of 5.50%.
The changes, which are applicable to single dwellings and houses in multiple occupation for all purchase and remortgage applications, provide more financing options for personal ownership and buy-to-let clients seeking larger loans.
“These changes offer brokers increased affordability options at a time when their clients may be struggling to find suitable financial solutions,” said Adrian Moloney (pictured), group intermediary director at the OSB Group.
“The ICR simplification will allow higher and additional rate landlords to access loan amounts which may have been out of reach, while our improved assessment rates will benefit limited companies through boosted finance opportunities and a wider choice of product options, which could support portfolio growth.”
Matthew Rowne, director of The Buy to Let Broker, welcomed the move from the specialist lender.
“Although there wasn’t a base rate rise this month, economic uncertainty remains, and these pragmatic changes from Precise Mortgages offer our clients enhanced opportunities,” he said. “Of particular interest will be access to larger loan sizes so these changes are certainly welcomed.”
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