You are here: Home - News -

Virgin Money introduces BTL top-slicing and cuts stress rates

  • 18/04/2018
  • 0
Virgin Money introduces BTL top-slicing and cuts stress rates
Virgin Money has introduced several changes to its buy-to-let lending policy including cutting a range of stress rates and allowing borrowers to include income to cover rent shortfalls.

The lender noted that top-slicing, where a landlord’s personal income is used to cover any shortfall in rent, will now be considered to justify affordability on between 100% and 145% of the mortgage payment, calculated at an interest rate of 5.50%.

Landlords exercising this option will need a minimum income of £50,000 excluding income received from buy-to-let properties.

Virgin Money has also cut stress rates in two situations.

The interest stress rate on five-year, fixed rate products has been reduced from 5.24% to 5.00%. For all other products the stress rate will remain at 5.50%.

And the straight balance swap stress rate has been reduced from 5.99% to 5.50%.

The lender appears to be making a push into the buy-to-let sector with the moves and has already confirmed it will enter the portfolio lending space this year.


Essential or dangerous?


Experts have noted that the practice of top-slicing is becoming almost essential for landlords to operate effectively in the market following the raft of regulatory and tax changes introduced over the last two years.

However, speaking at the Buy To Let Market Forum in Manchester yesterday, Mortgages for Business chief executive David Whittaker, warned that it could be highly risky if they become portfolio landlords.

“They cannot move upwards, downwards or sideways because they’re over geared and they’re over stressed and they can’t get the next property,” he said.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Buy To Let Market Forum 2018: Top slicing is the ‘devil’s spawn’ – David Whittaker

Top slicing in landlord mortgages is a destructive trend that could store up bigger problems for the future, David Whittaker,...