Buy to let mortgages – new affordability rules from January 2017.
The Prudential Regulation Authority have set new affordability rules for buy to let mortgages that apply from January 1st 2017.
Lenders, who offer buy to let mortgages, now must abide by a strict stress test to ensure minimum affordability thresholds. In the event of mortgage rates rising to 5.5%, the test is designed to make sure landlords can continue to make repayments, at the same time as making a 25% profit.
To find out if you will be affected by this change:
- Make a list of your properties.
- Revise the mortgage amounts.
- Revise the outstanding balances.
- Note the rental income for each property.
- Apply the stress test.
If you are a landlord who is seeking to add to your portfolio, or you want to take advantage of low remortgage rates by switching to another lender, the new affordability rules must be met.
Obtaining professional advice from buy to let mortgage expert, Deal Direct, is essential.
We can walk you through the changes and what they mean for you, as well as advise you on your mortgage options.
Contact one of our highly qualified buy to let mortgage advisers today on 0800 048 8828.
Please be aware that we regulated to offer independent mortgage advice but not general financial advice. Therefore, if you wish to discuss the suitability of property as a viable investment, Deal Direct urges you to contact an independent financial adviser.
Please note that buy to let mortgage applications from:
- applicants whose intention is to benefit from house price growth
- applicants whose intention is to benefit from rental income
- applicants who are letting to buy
will be treated as a normal buy to let and not as a consumer buy to let. In addition, their subsequent remortgage applications will also be treated in the same manner.
For free, impartial and ‘whole of market’ advice on the latest rate reductions, speak to one of our to let mortgage buy advisers.
Contact independent mortgage broker, Deal Direct, on 0800 048 8828.
