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Mansfield announces portfolio buy-to-let approach

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The Mansfield Building Society has announced the approach it will take to portfolio buy-to-let after the PRA brings in new underwriting standards from 30 September.

Portfolio landlords will be required to provide an assets and liabilities statement and a detailed schedule of all properties and loans outstanding.

Mansfield will use a stressed interest rate of 5.5 per cent, or 2 per cent above pay rate, whichever is higher.

The interest coverage ratio will now be calculated at 125 per cent for business buy-to-let for  basic rate tax payers.

Consumer, regulated and family buy-to-let will all be calculated using an ICR of 125 per cent of the monthly mortgage interest payment, even for higher rate taxpayers.

The same applies to pound-for-pound remortgages.

For higher rate taxpayers, any business buy-to-let purchases will be calculated using an ICR of 145 per cent.

The same rate will apply to business buy-to-let remortgage applications with extra borrowing.

Mansfield Building Society mortgage executive David Newby says: “We believe the above changes, and the further enhancements we’re about to announce, reaffirm our support for the buy-to-;et market and we’re looking forward to sharing more news with you very soon.”

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