Precise Mortgages, part of OSB Group, has updated its minimum Interest Coverage Ratio (ICR) and stress rate assessments to provide more financing options for personal ownership and buy-to-let clients.
Under the new guidelines, the minimum ICR for higher rate and additional rate taxpayers has been reduced from the previous levels of 145% and 160% to a new standard of 140%.
Additionally, stress rates for short-term fixed rates and variable rate trackers will now be assessed at the pay rate plus 1.55%, with a 5.50% minimum.
These modifications apply to single dwellings as well as House in Multiple Occupation (HMO) properties and are valid for both purchase and remortgage applications.
Adrian Moloney, group intermediary director at OSB Group, said: “These changes offer brokers increased affordability options at a time when their clients may be struggling to find suitable financial solutions.
“The ICR simplification will allow higher and additional rate landlords to access loan amounts which may have been out of reach, whilst our improved assessment rates will benefit limited companies through boosted finance opportunities and a wider choice of product options, which could support portfolio growth.”
Matthew Rowne, director of The Buy to Let Broker, welcomed the news: “Although there wasn’t a base rate rise this month, economic uncertainty remains and these pragmatic changes from Precise Mortgages offer our clients enhanced opportunities. Of particular interest will be access to larger loan sizes so these changes are certainly welcomed.”
