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OneSavings Bank changes BTL affordability tests

OneSavings Bank will be changing its affordability assessments for new buy-to-let business from 28 December.

The minimum rental cover stress rate will be the highest of 5.5 per cent or the initial pay rate plus 1.55 per cent.

Remortgages with no additional borrowing will not have a minimum stress rate, with rental cover assessed against the initial pay rate plus 1.05 per cent.


Five-year fixed rate applications will continue being stress-tested at the initial pay rate.

OneSavings Bank has also changed its definition of standard property to include HMOs or multi-lets/student lets of up to five rooms.

The new definition also applies to blocks of flats with up to four units, as well as single dwellings.

OSB will now define a portfolio borrower as someone owning four or more investment properties, including the subject property.

Non-portfolio borrowers will be individual applicants owning three investment properties or fewer, including the subject property.

The new definitions do not apply to those borrowing through a limited company.

The changes apply to OSB brands Kent Reliance and its subsidiaries InterBay Commercial and Prestige Finance.

OSB group chief credit officer Richard Wilson says: “We have invested a significant amount of time and resource reviewing the new policy and our changes reflect a fair and equitable position for the markets we serve.

“We believe what we have delivered is a robust and responsible revision to our policy in line with the new PRA rules.”

OSB sales & marketing director John Eastgate says: “By taking a forensic approach in response to the PRA changes we’ve continued to support our broker partners with changes that meet both regulatory requirements and also the needs of their customers.”

Mortgages for Business chief executive David Whittaker says: “Their definitions between smaller and larger HMOs and blocks of flats are helpful in allowing brokers to determine where these transactions sit within the Kent Reliance and InterBay brands and will be welcomed by the market.”


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