New affordability approach for Buy to Let remortgage without capital raising

From Wednesday 19 April, we'll assess eligible Buy to Let (BTL) remortgage applications without capital raising using a minimum of 125% rental cover at a 5.00% affordability rate up to 75% LTV.

This transitional arrangement supports borrowers who already had a BTL mortgage before the new PRA BTL affordability guidelines came into effect on 1 January 2017.

Eligibility criteria (transitional)

We'll only consider remortgage applications without capital raising under transitional arrangements that meet the following criteria:

  • New BTL remortgage application must not capital raise (adding product fees is allowed)
  • Property must have been purchased before 1 January 2017
  • No additional BTL lending has been taken on or after the 1 January 2017

We do not accept BTL remortgage applications without capital raising that do not meet the above criteria.

Summary of our Buy to Let affordability calculations

Application type up to 75% LTV Minimum rental cover  Buy to Let affordability rate 
 BTL purchase 145%  5.50%
 BTL remortgage with capital raising 145% 5.50%
 BTL remortgage without capital raising (meets eligibility criteria for transitional arrangements above) 125% 5.00%

 Our BTL calculator will confirm the maximum we may lend to the customer.

New residential applications with properties in the background

There is no change to the residential affordability assessment where the applicant has a let or to be let property in the background.

Background property  Minimum rental cover   Affordability rates  
Up to and inc. 60% LTV  Over 60% LTV 
 Already let or to be let   125% 5.00% 5.50% 

Pipeline rules for this change

All full mortgage applications (FMAs) submitted via Introducer Internet by close of business on Tuesday 18 April will continue to be progressed using our existing lending criteria.

Any applications submitted from Wednesday 19 April, or where a material change is made to an FMA submitted before close of business Tuesday 18 April, will be assessed using our new policy.