The Mortgage Works has reduced its stress rate by 0.50% on new buy-to-let (BTL) applications up to 65% loan to value for selected mortgages.
These include five-year fixed rate terms, or like for like remortgage (all fixed product terms).
The new stress rate will be 4.00% or pay rate whichever is higher.
The Mortgage Works director of landlord Damian Thompson says: “These positive changes to our stress rates will serve to boost affordability. They will enable landlords to borrow more with us but, at the same, will ensure that we continue to lend responsibly.”
This comes after other lenders including Nationwide, Barclays, Investec and Hodge made adjustments to their stress rate.
In May, Barclays eased its stress testing to allow customers to borrow £30,000 extra to buy a home while Nationwide adjusted its mortgage affordability calculation by reducing its stress rates by between 0.75 and 1.25 percentage points.
Meanwhile, Investec reduced its residential stress rates by up to 2.10% and Hodge eased affordability stress rate calculations to allow it to grant loans that are almost 20% larger for average customers.
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