The specialist lender said the introduction of Prudential Regulation Authority (PRA) rules on buy-to-let affordability has left some brokers confused as lenders publish their new criteria.
Instead of a taking a ‘bucket’ approach to Interest Coverage Ratios (ICRs) and increasing them all to 145%, Precise is launching bespoke Interest Coverage Ratios (ICRs).
These will take each customer’s individual circumstances into consideration, which Precise says will help landlords get the buy-to-let mortgages they want. For example, if joint applicants have different tax positions, such as one being a higher rate tax payer and the other basic rate, the lender’s bespoke ICR will return larger loan sizes than the ‘bucket’ approach.
Managing director for Precise Mortgages Alan Cleary (pictured) said: “Our buy-to-let calculator allows mortgage intermediaries to know how much their clients could borrow from us before they start the application process.
“They will also be able to compare and contrast different ways of setting cases up in order to achieve the best outcome.
“The calculator is similar to the one used by our underwriters to assess cases so it will save intermediaries and us time and effort. We believe that in the majority of cases a bespoke ICR will be superior.”