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Hinckley & Rugby to stress BTL at 5.5% and 145%

Hinckley & Rugby Building Society will increase its buy-to-let interest cover ratios from 135 per cent to 145 per cent from New Year’s Day.

New applications will be stressed at 5.5 per cent, rather than the current figure of pay rate plus 2 per cent.

The move follows upcoming requirements from the Prudential Regulatory Authority which apply from January 1 2017.


The exception is the lender’s five-year fixed rate products, which will have a requirement of 145 per cent coverage at pay rate.

These loans are currently underwritten at 2.75 per cent at 60 per cent LTV.

The society can consider applications which fail these thresholds by considering personal income to cover the rental shortfall.

The interest coverage ratio would then be a minimum of 145 per cent at pay rate, and an affordability assessment would consider verified income and expenditure.

Hinckley & Rugby head of intermediary sales Carolyn Thornley-Yates says: “At Hinckley & Rugby we recognise that good quality buy to let applications aren’t defined solely by the amount of rental income generated, and that there are instances where the personal ability of the borrower is more than sufficient to support a small portion of the loan, now and in the future.”



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