Mansfield Building Society has launched a buy-to-let product with an income coverage ratio as low as 100%, as personal income is considered alongside rental income with affordability assessments.
The ‘Family Buy to Let mortgage’ has a pay rate of 4.24% for three years up to 75% loan-to-value, with an £199 application fee and a £1,800 completion fee.
To fit criteria landlords need enough uncommitted income to support the difference between a 100% income coverage ratio and 125% (for basic rate taxpayers) or 145% (for higher rate taxpayers). The product is calculated at a pay rate of 4.24%.
Mike Taylor, head of products, said: “By allowing uncommitted personal income to be taken into consideration, we believe that we’re providing a terrific option for landlords looking to purchase (or remortgage) a property to let out to parents, siblings or children.
“We feel it’s important that, where uncommitted personal income is available, landlords should have the opportunity to choose a property that is appropriate for their family circumstances and needs without having to charge excessive rental payments purely to meet strict ICR calculations.
“We can see this type of lending appealing to those looking to give loved ones independence and security whilst retaining and accumulating wealth in the property over time.
“Not only does this new product show how the society’s pragmatic underwriting can support niche markets, it is also offering increased choice, something that we believe fits well with our mutual ethos.”
This product launch comes after Standard & Poor’s released a study saying buy-to-let investors from 2014 to 2016 will struggle to remortgage onto similar terms due to stricter underwriting requirement across much of the industry.