A stress rate of 4.99% will continue to apply on all fixed rate products of 5 years or more, regardless of LTV.
For applications where overall lending with the Nationwide Group exceeds £1m, a stress rate of 5.99% will remain in place.
TMW managing director Henry Jordan says:
“As a responsible lender, we continually review our criteria and these changes are intended to give an extra measure of protection to our customers.
“Tiering stress rates by LTV ensures alignment to our pricing structure and reflects the likely options available to landlords when their existing product matures.”
Mortgages for Business managing director David Whittaker says:
“With other forms of credit it can be logical to have a multi-tiered approach to stress testing but given that TMW themselves are stating this will affect a very small portion of its customers, I don’t see the sense in it.
“It simply adds another band and subsequently another layer of complication and with very little evidence as to why. It does not seem to provide a great deal of benefit to the lender and it will limit the borrowing options for clients.”
