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Platform adjusts eligibility for lower ICR rate

  • 27/11/2017
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Platform adjusts eligibility for lower ICR rate
Platform, the intermediary mortgage brand of the Co-operative Bank, said that lower rate tax payers looking for a buy-to-let (BTL) mortgage will now be assessed using a minimum of 128% interest coverage ratio (ICR), at a notional interest rate of 5.50%.

The 128% rental cover figure was previously only available to landlords looking to secure a remortgage with no additional funding.

However, this will now be available to all lower rate tax payers, regardless of whether additional funding is required.

The lender said that the adjustment will support “more landlords who may have found access to BTL mortgage products difficult after the Prudential Regulation Authority (PRA) affordability guidelines came into effect in January 2017.”

Higher rate tax payers are assessed at 145% when additional borrowing is required – in continuation of the rate Platform put in place when PRA affordability guidelines came into force.

In all instances, a notional interest rate of 5.5% is applied, said the lender.

This January, PRA affordability tests came into effect, including a minimum stress test of 5.5%, and a minimum ICR of 125%.

Paul Norcott, head of mortgages and insurance at The Co-operative Bank and Platform, said: “We have been closely following developments in the BTL market since the new PRA guidelines were published,” said Norcott “and we know that securing buy-to-let mortgages has been more difficult for some landlords since the market adopted those guidelines.”

He added: “These further changes to our buy-to-let criteria demonstrate that, whilst we remain extremely committed to responsible lending, we also want to take a common sense approach that supports a variety of landlords looking for a competitive deal for their borrowing needs.”

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