The new product is available from Thursday 16 June 2004.
Once borrowers have chosen how long to fix for, they can also take advantage of The Mortgage Works' new sliding LTV scale to determine rental income requirements. This means that a property's equity directly determines the income level needed to support the loan. For example, LTV's of 65% and under need only 100% coverage of rental income based on mortgage payment of Bank Base Rate plus 1.45% interest only (or the actual pay rate if higher).
Commenting on changes, Associate Director for The Mortgage Works, Paul Howard said, "Due to rising interest rates, more and more landlords are choosing longer term fixed rates and we can now give them this product at the same price as a short fix. We expect a lot of demand for this product. However, possibly the biggest difficulty in the Buy-to-Let market at present, is passing the rental income test which most lenders apply."
"We have come up with a unique method of easing this problem with the introduction of our “sliding LTV scale”. Essentially, the more equity you put into the property the lower the rental income needs to be to justify the loan required. We think this is a very pragmatic way of addressing a very real problem", Howard added.
