The move applies to all 85 per cent loan-to-value (LTV) and 90 per cent LTV products and is designed to appeal to landlords with tight rental yields.
Trevor Child, head of marketing at CHL Mortgages, said: “We have lowered the rental cover required on all products, something which is going to be very useful for landlords experiencing tightening rental yields as a result of increases in the Bank of England Base Rate (BBR.) The 115 per cent cover is applicable to all rates including new launches. As always, unlike other lenders, our rent cover is based on the actual pay rate.”
The move coincides with the launch of two new BTL products by CHL. The first is at BBR plus 1.24 per cent with no completion fee. It carries an early repayment charge of 2 per cent until 31 October 2007.
The second is a 4.74 per cent two-year fix, available up to 90 per cent LTV. It matures on 31 January 2009.
Child added: “These new product rates reaffirm our position in the BTL market and represent spectacular value when set against what the competition is offering. We are expecting a lot of new business on the back of them.”
Greg Pognowski, senior consultant at Ample Financial Services, commented: “Most mortgage lenders require 125 per cent, but Northern Rock has always asked for100 per cent – if it can do it why can’t everybody else? That said, CHL’s reduction of its rental cover to 115 per cent is a step in the right direction and will give it a competitive edge.”
