New stressed rate for buy-to-let mortages

The Mortgage Works is introducing a stressed rate for buy-to-let mortgages, Henry Jordan has said.

The managing director of The Mortgage Works said the firm, which is part of the Nationwide Group, has introduced the rate of 5.49 per cent on applications between 65 per cent and 75 per cent loan-to-value to help borrowers withstand future rises in the Bank of England base rate.

“As a responsible lender, we continually review our criteria and these changes are intended to give an extra measure of protection to our customers,” Mr Jordan said.

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He added: “Tiering stressed rates by LTV ensures alignment to our pricing structure and reflects the likely options available to landlords when their existing product matures.

“Maintaining a stressed rate of 4.99 per cent on five-year fixed rates recognises the additional payment security that longer-term products provide.

“Together, these changes strike the right balance between prudence and supporting the market.”

Adviser view

Marcus Hollick, of London-based Probitas Mortgages, said: “It is time for a degree of caution.

“There seems to be a lot of talk about regulation around buy-to-let mortgages, and they try to pre-empt these things.”