Coventry for Intermediaries is increasing its rental calculations from 125% to 140% of the monthly mortgage interest payment or current product pay rate.
Its reference rates remain unchanged.
Kevin Purvey, director of intermediaries, said: “With the upcoming changes to mortgage tax relief for landlords, there will be a detrimental impact for many Buy to Let investors. We have made the decision to adjust our rental calculation to ensure that applicants can afford their mortgage both now and in the future”.
The new calculation will be applied to all buy-to-let applications submitted from 8pm on Wednesday 13 July.