Platform adjusts rental cover for lower rate payers

Ryan Fowler

November 27, 2017

Platform will assess all buy-to-let mortgage applications made by lower rate tax payers, using a minimum of 128% rental cover at a notional interest rate of 5.50%.

Before the change this was only available to landlords looking to secure a remortgage with no additional funding.

As previously announced buy-to-let remortgage applications by higher rate taxpayers where no additional borrowing is required are also assessed using a minimum of 128% rental cover, however; higher rate taxpayers applying for a mortgage to purchase or a remortgage when additional borrowing is required will be assessed at 145% rental cover which is a continuation of the rate that was put in place when the PRA affordability guidelines came in to force. In all instances the notional interest rate of 5.50% will apply.

Accidental landlords add 80,000 rented homes to the market

This adjustment supports more landlords who may have found access to buy-to-let mortgage products difficult after the PRA affordability guidelines came into effect in January 2017. This change in criteria means brokers will have an increased choice when looking for the most suitable buy-to-let mortgage for their clients.

Paul Norcott, head of mortgages and insurance at The Co-operative Bank and Platform, said: “Having recently reviewed and changed our criteria for assessing ICR for those looking for a buy-to-let remortgage we’re pleased to be able to make further changes that open up our mortgage products to better enable brokers to find options for a wider range of landlord clients’ needs, notably including an ICR of 128% for all lower rate taxpayers looking for a buy-to-let mortgage.

“We have been closely following developments in the buy-to-let market since the new PRA guidelines were published, and we know that securing buy-to-let mortgages has been more difficult for some landlords since the market adopted those guidelines.

“These further changes to our buy-to-let criteria demonstrate that, whilst we remain extremely committed to responsible lending, we also want to take a common sense approach that supports a variety of landlords looking for a competitive deal for their borrowing needs.”

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