Coventry for Intermediaries is adjusting its buy-to-let lending policy in advance of the changes to landlord tax relief which take effect from April 2017.
Its rental calculation will be increased from 125% to 140% of the monthly mortgage interest payment and will be calculated using the reference rate or current product pay rate, whichever is higher.
Its reference rates remain unchanged.
The new calculation will be applied to all buy-to-let applications submitted from 8pm on Wednesday 13 July.
Kevin Purvey, director of intermediaries, said: “With the upcoming changes to mortgage tax relief for landlords, there will be a detrimental impact for many buy-to-let investors.
“We have made the decision to adjust our rental calculation to ensure that applicants can afford their mortgage both now and in the future.”
