Five-year fixed rates will not be affected by the change, with the reference rate for these loans remaining at 5% and the interest coverage ratio staying at 140%.
Kevin Purvey (pictured), director of intermediaries, said: “In line with PRA guidance we have increased our reference rate to 5.5% on products with a benefit period of less than five years. We are making the announcement today to give brokers as much notice as possible to submit applications before the deadline.”
Full applications submitted by 8pm on Wednesday 14 December will not be affected by the changes and Coventry’s lending criteria and affordability calculators to be updated to reflect the new rate.
Coventry has already responded to the incoming changes to mortgage tax relief for landlords by upping its rental coverage calculation from 125% to 140%, which changed in July. At the time, Coventry also increased the reference rate of 5% to 5.5% for applications up to 75% loan-to-value (LTV).
The latest amendments to Coventry’s buy-to-let policy and range include moving its maximum age at the end of term from 74 to 85 and recently launched 70% LTV fixed rate deals.