New Buy to Let affordability rate and portfolio landlords

On Monday 24 July, we're making some important Buy to Let (BTL) changes.

New BTL 5 year fixed affordability rate

Where all the borrowing will be on a 5 year fixed rate, we're introducing a new 4.50% BTL affordability rate.  

Application type

Rental cover

Buy to Let affordability rate

Less than 5 year products

5 year fixed

BTL purchase

145%

5.50%

4.50%*

BTL remortgage with capital raising

145%

5.50%

4.50%*

BTL remortgage without capital raising (meets eligibility criteria for transitional arrangements)

125%

5.00%

4.50%*

* Porting applications don't qualify for the 4.50% affordability rate, so 5.50% will apply.

All applications will still need to be self-financing, so the rent must cover both 100% of the mortgage payment and monthly running costs.

Portfolio landlords

Under incoming PRA guidelines, if your client(s) owns four or more mortgaged let properties either on their own or with anyone else, they'll be considered a portfolio landlord.

Remortgages without capital raising 

We'll accept portfolio landlord applicants who meet the following transitional eligibility criteria:

  • BTL remortgage application isn't capital raising (adding product fees is allowed, adding ERCs is not allowed)
  • BTL property was purchased before 1 January 2017
  • No additional BTL lending has been taken on or after 1 January 2017.

Please make sure evidence for the above criteria is obtained prior to the date of the mortgage application and is retained on file for a minimum of two years. We undertake regular checks to make sure our criteria have been met.

In addition, portfolio landlord applicants must also meet our income and property criteria on completion of the new mortgage: 

Minimum income

£25,000

£50,000

Maximum number of mortgaged let properties with Santander

4

5

Maximum number of let properties (mortgaged and mortgage-free)

4

7

For portfolio landlord applications, there's no change to how we process the case and we won't need any additional case packaging evidence to support the application.  

Purchases and remortgages with capital raising

We won't accept portfolio landlords.

Non-portfolio landlords must now meet our income and property criteria on completion of the new mortgage:

Minimum income

£25,000

£50,000

Maximum number of mortgaged let properties with any lender

3

3

Maximum number of let properties (mortgaged and mortgage-free)

4

7

Pipeline rules for this change

All full mortgage applications (FMAs) already submitted on Introducer Internet by 9pm on Saturday 22 July won't be affected and will continue to be progressed on our existing BTL lending policy. 

Any FMAs submitted from 6am on Monday 24 July, or where a material change is made to an FMA submitted before 9pm on Saturday 22 July, will be assessed using the new BTL lending policy. 

Introducer Internet downtime

Introducer Internet won't be available from 9pm on Saturday 22 July until 6am on Monday 24 July while we make these updates.

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