Redwood Bank has announced several enhancements to its buy-to-let affordability, boosting loan sizes for landlords looking to refinance, release equity or fund new purchases.
The changes stem from three targeted adjustments: the removal of automatic cost deductions in affordability assessments, a reduction in the stress rate assessment for two and three-year fixed term loans, and the option to use the higher 5% fee for two and three-year fixed terms.
The changes to cost deductions could release an additional £40,000, a 6% increase in LTV for those refinancing a buy-to-let property.
The option to now have a 5% fee on a lower rate three-year fixed term could help a client refinance a large HMO with a 15.5% increase in LTV available.
For a commercial deal, an additional 4.9% LTV is available for the client to acquire new premises.
Buy-to-let borrowers can secure up to 16% extra LTV, semi-commercial loans will see an extra 18% uplift, HMOs can benefit from up to 21% higher LTVs, while commercial clients can secure 8% more.
Redwood says the changes come at a crucial time for property investors, particularly in the South of England where rising costs and tighter yields have limited borrowing potential.
Mark Dobson (pictured), head of business development (South and London) at Redwood Bank, said: “This is exactly the kind of market intervention that landlords need right now. My team in the South have already seen the benefits for our brokers and borrowers with notable increases in LTVs available.
“It’s a game-changer for landlords wanting to progress deals and fund their next move.
“There’s strong broker interest in these affordability improvements. I spoke to countless brokers at the recent NACFB Expo, about the ‘affordability boost’ and how it’s enabling better outcomes for their clients across the country, but especially the South East.”
