Precise lowers ICR and stress rates for buy to let

  • 26/09/2023
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Precise lowers ICR and stress rates for buy to let
Precise Mortgages has announced that it has simplified the minimum interest cover ratio (ICR) for personal ownership applications, and will lower its assessment and stress rates for buy-to-let products.

The lender, which is part of the OSB Group, will improve how it assesses buy-to-let affordability on short-term fixed rates and variable rate trackers.

The changes are designed to provide greater financing options for home ownership and buy-to let-clients who are seeking larger loans. This could be pique the interest to those who are higher and additional rate taxpayers.

The changes include a minimum ICR rate for higher and additional rate taxpayers, which will now be 140%. Previously, it was set at 145% and 160% for higher and additional rate payers respectively.

The stress rate for short-term fixed and variable rate trackers will be evaluated at pay rate plus 1.55% (minimum 5.50%).

Additionally the changes will be applicable to single dwellings and houses in multiple occupation, for all purchase and remortgage applications.


Greater opportunities for clients

Adrian Moloney (pictured), the group intermediary director at the OSB Group, said: “These changes offer brokers increased affordability options at a time when their clients may be struggling to find suitable financial solutions.

“The ICR simplification will allow higher and additional rate landlords to access loan amounts which may have been out of reach, whilst our improved assessment rates will benefit limited companies through boosted finance opportunities and a wider choice of product options, which could support portfolio growth.”

Matthew Rowne, director of the Buy to Let Broker, added: “Although there wasn’t a base rate rise this month, economic uncertainty remains and these pragmatic changes from Precise Mortgages offer our clients enhanced opportunities.”

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