Accord  

Accord changes buy-to-let rental cover criteria

Accord changes buy-to-let rental cover criteria

Accord has reduced its minimum rental cover requirements for landlords looking to remortgage a buy-to-let property.

The lender stated those who do not require any additional borrowing will benefit from an interest cover ratio of 125 per cent at a stressed rate of 5.5 per cent, as opposed to 135 per cent at the same stressed rate.

This will apply to those looking for a two or three-year fixed rate mortgage.

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Landlords who are remortgaging, not taking further borrowing and opting for a five-year fixed rate will continue to have an interest coverage ratio (ICR) of 135 per cent at a stressed rate of 5.5 per cent or the product rate.

Chris Maggs, commercial manager at Accord Buy-to-Let, said: "We already offer a competitive rental calculation. We expect there will be a strong remortgage market during 2018 so we have made the decision to reduce our ICR to support landlords who are refinancing their portfolio, which will now be one of the most competitive in the market.

"We have always taken a cautious approach to our rental calculations to ensure landlords are able to cover all cost associated with managing a rental property.

"This is the first of a series of changes to simplify our rental calculations to make things as easy as possible for brokers and landlords."

Christopher Taylor, director of the London Mortgage Brokers, said rental cover requirements were a huge problem for landlords in London.

He said: "They are pretty strict."

When asked about Accord's decision, he said: "This is a step in the right direction."