For loan-to-values (LTV) up to 65% the rental cover calculation will be 145% or 5% of the pay rate, whichever is higher. Applications up from 65.01% to 75% LTV will be assessed on a calculation of 145% of 5.5% or pay rate, whichever is higher.
All pipeline applications, including accepted decision-in-principles (DIP), keyed before 8pm on Wednesday 29 June will not be impacted, unless the DIP or application is cancelled and a new DIP or application is started at a later date.
This change will also apply when considering affordability for a residential mortgage, when the customer has buy-to–let mortgages in the background. The rental income should cover 145% of the buy-to-let mortgage at the customer’s pay rate.
Any shortfall will be included in the affordability assessment.
Roland McCormack (pictured), intermediary director, TSB, said: “Today’s change will bring TSB in-line with other lenders in the market. We will continue to work with brokers, through our award-winning service, to best guide landlords through this change.”
A spokeswoman for TSB confirmed the lender has no plans to alter its interest rates as a result of the UK’s vote to the leave the European Union.
