BM Solutions has cut its stress rates for new and remortgage buy-to-let applications.
From Monday (20 March), the lender will offer five-year fixed rate products with a stress rate of 5.25 per cent, compared to a standard rate of 5.5 per cent.
Further advances and porting applications will be excluded, and will therefore be subject to the standard rate.
The move follows the introduction of an intelligent rental income calculator in November 2016 to enable brokers to obtain a rental coverage ratio relative to higher and top-rate taxpayers’ individual circumstances.
Phil Rickards, head of BM Solutions, said: “The new stress rate forms part of our wider phased plans to support brokers in writing quality business in the new regulatory landscape.
“We created the rental income calculator in November to help higher and top-rate taxpayers get the right level of cover for their individual circumstances, and then moved stress rates at the end of 2016.
“We are continuing to invest in our service and commitment to the intermediary market and plans for the next phase are underway.”
Tony Salentino, director at Hampshire-based Complete Financial Services, said: “As a company, we are very much supportive of the buy-to-let market.
“It is a welcome move and shows the importance of being able to act responsibly and have some commercial aspect to the decisions they make.”
simon.allin@ft.com
