Mansfield Building Society has launched a family buy-to-let mortgage with interest coverage ratios from 100 per cent.
The product lets landlords let properties to close family members and is aimed at parents and their children.
Most buy-to-let loans have an ICR of 125 per cent at 5.5 per cent for a basic rate taxpayer or 145 per cent for a higher rate taxpayer.
However, the new Mansfield product gets around this by requiring landlords to have enough money to make up the shortfall.
A Mansfield statement says: “With the housing market in a state of flux, the society’s family buy-to-let product enables landlords, with sustainable uncommitted earnings, to support relatives without having to charge rental income over and above the mortgage payment just to meet a lenders strict ICR calculations.”
The loan has a three-year discounted variable rate and is available up to 75 per cent LTV.
It has a 4.24 per cent pay rate (1.35 per cent below SVR).
The loan has a £199 application fee and £1,800 completion fee and is available from £50,000 to £500,000.
Mansfield head of products Mike Taylor says: “By allowing uncommitted personal income to be taken into consideration, we believe that we’re providing a terrific option for landlords looking to purchase (or remortgage) a property to let out to parents, siblings or children.
“We can see this type of lending appealing to those looking to give loved ones independence and security whilst retaining and accumulating wealth in the property over time.”