The four five-year fixed rates come with a DSCR of 100 per cent, as opposed to the traditional 125 per cent.
This means landlords need only charge rent covering 100% of the mortgage repayments rather than 125%, therefore allowing them to borrow more.
The W1 standard has rates beginning from 6.09 per cent with a five per cent fee, with W1 standard rates start from 6.59 per cent with a 2.5 per cent fee.
The W1 specialist prices start from 6.29 per cent with a five per cent fee and W1 specialist with 2.5 per cent fee begins from 6.79 per cent.
West One Loans said the deals were aimed at “high-quality borrowers who are locked out of the market, or cannot borrow as much as they could 12 months ago because yields have failed to keep pace with rapidly rising mortgage rates”.
The lender said that although the deals have higher rates, the lower DSCR requirements mean landlords can borrow more.
For example, on a property yielding 3.5 to four per cent, the maximum loan to value (LTV) a landlord could achieve at an interest rate of 5.5 per cent at 125 per cent DSCR would be around 50 per cent. However, on the new 100 per cent DSCR range, the maximum LTV would be 57 per cent, or potentially tens of thousands of pounds more depending on the value of the property.
Meeting DSCR number one challenge for landlords
Andrew Ferguson (pictured), managing director of buy-to-let at West One Loans, said: “Meeting a lender’s debt service coverage ratio requirements is the number one challenge facing landlords at the moment.
“Base rate rises coupled with market volatility have shifted rates upwards of 5.5 per cent. However, in many parts of the country yields haven’t yet caught up, leaving many high-quality borrowers with limited options upon product maturity other than to accept high reversion rates or inject personal cash into the transaction to facilitate the remortgage.
“By launching our new limited edition enhanced DSCR range, we hope to help brokers’ clients meet this challenge and to offer them the finance they need.
“However, this doesn’t mean we are dropping our standard. In order to protect borrowers and to maintain the quality of our lending book, landlords will still have to go through the same bespoke and rigorous underwriting process they always do.”
