Accord has reduced its minimum rental cover requirements for all landlords who are seeking to remortgage a buy to let investment property.
Accord has announced that all landlords who do not require any additional borrowing for their deal will benefit from an interest cover ration of 125 per cent. This will be applied at a stressed rate of 5.5 per cent, in comparison to the 135 per cent figure at the stressed rate. The deal is applicable to all those who are seeking a two or three-year fixed rate mortgage.
For landlords who are remortgaging rather than taking further borrowing, as well as opting for a five-year stressed rate, will continue to receive an interest coverage ratio (ICR) of 135 per cent. This will be applied at 5.5 per cent of the product rate.
Commercial manager at Accord Buy to Let, Chris Maggs, commented on the new offerings: ‘We already offer a competitive rental calculation. We expect there will be a strong remortgage market during 2018 so we have made the decision to reduce our ICR to support landlords who are refinancing their portfolio, which will now be one of the most competitive in the market. We have always taken a cautious approach to our rental calculations to ensure landlords are able to cover all cost associated with managing a rental property. This is the first of a series of changes to simplify our rental calculations to make things as easy as possible for brokers and landlords.’
Director of London Mortgage Brokers, Christopher Taylor, explained that rental cover requirements could be a huge issue for landlords situated in London. He confirmed that ‘They are pretty strict.’
Mr Taylor therefore praised Accord’s decision to reduce minimum rental cover requirements, saying that the changes will be ‘a step in the right direction.’