Buy-to-let lender Landbay has announced the introduction of a new selection of like-for-like remortgage products designed to alleviate affordability challenges for landlords.
With these new offerings, the Interest Cover Ratio (ICR) stress test will be set at the pay rate plus 1%, rather than the standard rate of pay plus 2%.
The remortgage products, which all feature a 2-year fixed rate and a gross loan-to-value (LTV) of 75% (inclusive of fees), will serve landlords remortgaging with no alterations to their borrowing requirements.
Landbay’s offerings range from interest rates of 4.99% to 5.99% for standard properties, including those for trading companies. As an example, a product featuring a 4.99% rate includes a 4% fee with a maximum loan size of £1m, while another at 5.99% includes a 2% fee, also catering for a loan size of up to £1m.
A further product, also at 5.99%, carries a fixed fee of £1,499 with the loan size capped at £74,999.
Trading companies seeking to remortgage can benefit from a 2-year fixed-rate product with a 5.69% rate, a 3% fee, and a maximum loan size of £1m.
Landbay’s recently introduced loyalty remortgages for existing customers will also be subject to this reduced ICR stress test.
Paul Brett (pictured), managing director of intermediaries at Landbay, said: “There is a lot of remortgage activity this year and we are acutely aware that borrowers will have to take higher rates than their current deal.”
Brett further explained the rationale behind the new stress test rate, aid: “Applying a stress test is always a requirement but we have tried to soften the blow for buy-to-let landlords whose mortgage is due for renewal.
“Lowering the rate on the stress test allows borrowers more breathing space when the affordability calculation is applied.”
