OneSavings Bank PLC has announced changes to its interest coverage ratio (ICR) requirements for all buy-to-let loans through trading brands Kent Reliance and InterBay Commercial .
The specialist bank's changes aim to substantially simplify ICR requirements, potentially allowing customers to increase the amount they can borrow against their BTL property.
The new approach includes:
- 140% ICR requirement for an individual with standard BTL property
- 160% ICR requirement for an individual with specialist BTL property
- 125% ICR requirement for a limited company with standard BTL property
- 145% ICR requirement for a limited company with specialist BTL property
The definitions of standard and specialist property will remain unchanged with standard BTL properties including single dwellings, HMO/student/multi-let properties that have five or fewer rooms, and freehold blocks with four or fewer residential units.
Specialist BTL properties include HMO/student/multi-let properties with six or more rooms, and freehold blocks with five or more residential units.
Adrian Moloney, sales director at OneSavings Bank (pictured above), said: “Not only will these changes simplify the buy-to-let loan process and improve understanding among our brokers and their clients, but this simplification could also mean the opportunity for landlords to borrow more should they need to.”
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