mortgage works

The Mortgage Works improves affordability criteria

The Mortgage Works has made significant revisions of its affordability criteria, effective from tomorrow (March 5th 2024).

The adjustments primarily focus on Interest Cover Ratios (ICRs), with reductions aimed at enhancing borrowing capacity for landlords across different tax brackets and property types.

For higher rate taxpayers, the ICR was reduced from 165% to 160%; for limited company and lower rate taxpayers, the ICR was reduced from 130% to 125%.

The Mortgage Works also reduced its Existing Portfolio Rental Calculation stress rate from 5% to 4.5%.

Joe Avarne, senior manager, buy-to-let mortgages at The Mortgage Works, said: “We regularly review our affordability policy to ensure borrowing is sustainable for our landlords.

“With these latest changes, we’re pleased to be able to reduce our Interest Cover Ratios so that landlords can borrow more and achieve their buy-to-let aspirations.”