With Platform's core 5 year tracker loan at BBR + 0.90% (currently 4.90%), £115 less rental income per month is now needed to service a £100,000 loan, or alternatively an extra £20,000 can be borrowed for the same rent.
The new calculation method will help buy-to-let borrowers in areas like the south-east where rental values have fallen and house prices have risen, making it harder to achieve rental yields that will cover the required mortgage repayments. Following this change, intermediaries can now help clients in higher property price areas and have the extra ability to raise
an additional £10,000 for every £50,000 borrowed.
The new 5 year tracker product uses the pay rate, rather than the
reversionary rate, to calculate repayments, giving borrowers greater flexibility. The examples below show the impact this has on rental income required to secure the loan:
£100,000 @ 5.95% (reversionary rate) - £645 per month rental
needed
£100,000 @ 4.90% (new pay rate) - £530 per month rental
needed
£120,000 @ 4.90% (new pay rate) - £637 per month rental
needed
Platform has also introduced two special lifetime trackers via a number of its mortgage club and network partnerships, which likewise benefit from using the pay rate. Rate start from BBR + 0.99% for the lifetime of the loan.
Guy Batchelor, Sales and Marketing Director at Platform, commented: "This change to our rental calculation method further confirms Platform's role as a major player in the buy-to-let market. We have introduced the changes in response to feedback from intermediaries who are dealing with buy-to-let borrowers particularly in areas where the ratio between rental
income and amounts borrowed has narrowed. Our new improved method of calculation means that they will now be able to offer Platform's products to a wider group of clients than ever before."
www.platformhomeloans.com
