Mortgage News
Leeds BS to use lower stress rate for pound-for-pound BTL remortgages
Leeds Building Society has revealed its plans for buy-to-let affordability ahead of looming changes to landlord taxation, including a lower stress rate of 5% for remortgages where there is no additional borrowing.
From 1 January, Leeds will implement an income coverage ratio of 140%, up from 125%, for buy-to-let and holiday let mortgages, in addition to an affordability stress test rate of 5.5% for purchase and capital raising remortgages.
Leeds said its decision to use a more favourable stress rate of 5% for pound-for-pound remortgages would help “a significant amount of landlords with existing properties looking to move and improve their portfolio”.
An income coverage ratio will not be required for existing Leeds customers at the end of their existing deal and borrowing the same amount.
In addition, Leeds will remove the minimum income requirement of £25,000 for individuals and £40,000 for joint applicants.
Richard Fearon, chief commercial officer, said: “We believe the combination of an income coverage ratio of 140%, a specific and lower stress test rate for remortgages, no minimum income requirement and our market expertise brings a unique proposition to the buy-to-let market.”
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