Accord Mortgages has reduced its buy-to-let (BTL) affordability calculations.
The intermediary-only lender says the reduction will enable landlords to continue providing private rental properties.
Where landlords are remortgaging on a like-for-like basis, the interest coverage ratio rate (ICRR) will drop to 6.5%, or product rate plus 1%.
Where landlords are capital raising, the lender is reducing the ICRR to 6.5% for products with an initial term of equal to, or greater than five years, or product rate plus 1%.
The ICRR also reduces to 7.5% for products with an initial term of less than five years or product rate plus 2%.
Meanwhile, Accord is simplifying the interest coverage ratio (ICR). The calculation applied will be 125% for all basic rate taxpayers and 145% for all higher rate taxpayers.
The changes apply to all new applications.
Accord Mortgages senior manager for new propositions Nicola Alvarez says: “As a BTL lender, not just a lender that does BTL, we’re constantly looking for ways to support brokers and their landlord clients.”
“We hope these latest positive changes to our criteria will help more landlords to continue servicing the BTL market, providing much sought-after private rented housing.”