BM Solutions is set to introduce a tiered approach to its rental assessment for buy-to-let and let-to-buy cases from 22 November.
Where a five-year fixed rate has been chosen the rental calculation will be based on 125% of a stress rate of 4.99%, irrespective of the loan-to-value (LTV) of the case.
Where the LTV is less than or equal to 65%, a stress rate of 4.99% will also be used in the rental calculation. For applications where the LTV is greater than 65%, stress rate will be increased to 5.49%.
Currently a flat rate of 125% of a 5% stress rate or the product pay rate, whichever is higher, is used.
BM Solutions said the change was being made to protect borrowers against interest rate rises, particularly those with higher LTVs.
There will be no change to the process and the calculations will be made by the system automatically.
