The lender has introduced the policy for those remortgaging buy-to let properties in light of changes to PRA rules on affordability that could leave existing borrowers unable to find new deals.
Coventry will apply a rate of 5% provided there’s no additional borrowing. Where applicants have gross annual income below £40,000, an income coverage ratio (ICR) of 125% will be applied, with an ICR of 140% for higher-rate taxpayers.
Director of intermediaries Kevin Purvey (pictured) said: “We’re delighted to be making positive changes by introducing our transitional buy-to-let affordability policy. We believe that the changes will provide more choice for brokers and their clients”.
The lender will shortly reveal its portfolio buy to let approach ahead of September’s PRA changes for portfolio landlords.