And lender arrangement fees can be added to loans on all products allowing borrowers to reach a genuine 75% loan to value for all property types.
The rental calculation is now from 130% of the pay rate based on the loan value net of added fees. This is a marked improvement on the previous requirements for the discounted rates of 100% of the reversion rate plus a minimum margin of 3%.
To put the new criterion into context when applying for a discounted rate mortgage for a standard property on a monthly rental income of £1,000 it is possible to borrow up to £185,000 compared to a maximum of £145,000 based on the previous rental income requirement.
David Whittaker, managing director of Keystone Buy to Let Mortgages and Mortgages for Business, said: “These changes highlight Keystone’s commitment to professional landlords with more complex needs. We are now offering a market leading rental income stress test on the 5-year fixed rates which can only be good news in the current economic climate.”
From today Keystone will also accept applications relating to property with corporate leases to public limited companies, local authorities and some housing associations as long as the leases are on a full repairing and insuring contract up to a maximum of five years.
This enhancement comes in response to the popularity of these contracts as they provide investors with the certainty of rental income over a longer time period without the risk of voids.
Rob Lankey, managing director of Commercial Mortgages at Aldermore, said: “We’ve listened carefully to landlords and believe that the recent reduction of more than 0.5% on our 5-year fixed rates will work particularly well for borrowers who like the security of longer term fixes coupled with the stability provided by corporate leases.”