Changes take place from 28 December.
OneSavings Bank will be implementing changes to its affordability assessments for all new buy-to-let mortgage applications through its Kent Reliance, InterBay Commercial and Prestige Finance brands from 28 December.
Key changes include:
- The minimum stress rate applicable for rental cover purposes will be 5.5%, or the initial pay rate plus 1.55%, whichever is higher
- Remortgages with no additional borrowing will not be subject to a minimum stress rate, with rental cover assessed against the initial pay rate plus 1.05%
- 5-year fixed rate applications will continue to be stress-tested at the initial pay rate, with no additional margin or minimum rate applicable
- OSB has extended its definition of Standard property to include HMO/multi/student lets up to five rooms, or blocks of flats with up to four units, as well as single dwellings
Unless borrowing through a limited company, applicants will be defined as a:
- Portfolio borrower: If any individual applicant owns four or more investment properties, including the subject property
- Non-portfolio borrower: If each individual applicant owns three or less investment properties, including the subject property
- Limited company borrowers will require lower rental cover than individuals borrowing in their own name, meaning they will typically be able to borrow more against the value of a property.