This follows on from last week’s increase in the maximum loan amount per transaction which was raised to £500K from £350K.
Lender arrangement fees will now be added to loans on all products in the Keystone range, including multi-units and HMOs, allowing borrowers to reach a genuine 75% LTV for all property types.
The rental calculation is now based from 130% of the pay rate across the full product range, based on the loan value net of added fees. This is a marked improvement on the previous requirements for the discounted rates of 100% of the reversion rate + a minimum margin of 3%; to put the new criterion into context, when applying for a discounted rate mortgage for a standard property, on a monthly rental income of £1,000 it will be possible to borrow up to £185,000 (subject to all the lending criteria) against a maximum of £145,000 based on the previous rental income requirement.
David Whittaker, managing director of Keystone Buy to Let Mortgages and Mortgages for Business, said:
“These changes highlight Keystone’s commitment to professional landlords with more complex needs, now offering a market leading rental income stress test on the five year fixed rates which can only be good news in the current economic climate.”
From today, Keystone will also accept applications relating to property with corporate leases to PLCs, local authorities and some housing associations as long as the leases are on a full repairing and insuring contract up to a maximum of five years. This new enhancement comes in response to the popularity of these contracts as they provide investors with the certainty of rental income over a longer time period without the risk of voids. Many borrowers also take a five year fixed rate in these cases to add an extra level of security.
Rob Lankey, managing director of Commercial Mortgages, at Aldermore, said:
“We’ve listened carefully to landlords and believe that the recent reduction of more than 0.5% on our five year fixed rates will work particularly well for borrowers who like the security of longer term fixes coupled with the stability provided by corporate leases”.
