West Brom for Intermediaries is switching its buy-to-let rental calculations to a fixed notional rate of 5.95%.
This is based on 100% interest-only cover, and comes into effect from March 1.
The societys rental calculation is currently based on 100% interest only cover at Bank base rate plus 1%.
The new calculation is based on a fixed notional rate of 5.95%, so if rates rise again, the rental calculation will remain unaffected.
Paul Marland, area general manager of intermediary sales at West Brom for Intermediaries, says: Brokers have found it increasingly difficult to place buy-to-let applications in a market where interest rates have been on the increase.
“A further rate rise will make life even tougher and many borrowers are being forced to top-up the rental using their earned income.
The societys view is that 5.95% will result in a rental calculation similar to our current calculation of base rate plus 1%.
“Our fixed notional rate of 5.95% will make life a lot easier and provide brokers and borrowers with certainty in a market where there is considerable conjecture that were in for another rate rise.