Precise Mortgages has put its buy-to-let calculator online so that brokers can see how much their clients can borrow.
The specialist lender says that the introduction of new PRA rules on buy-to-let affordability has left some brokers confused as lenders publish their new criteria. Many lenders have used a ‘bucket’ approach which has seen Interest Coverage Ratios (ICRs) increased to 145%. It means that many landlords can no longer borrow as much money as they did before the rule change, and in some cases will lead to a decline, Precise argues.
In a different move, Precise Mortgages has launched bespoke ICRs which take every customer’s individual circumstances into consideration. The lender claims that in many cases its ICR calculation will help landlords get the buy-to-let mortgage they want.
One example cited is where joint applicants have different tax positions, such as one being a higher rate tax payer and the other being a basic rate taxpayer. Worked examples have been published on the lender’s website which show how a bespoke ICR will return larger loan sizes than the ‘bucket’ approach.
Alan Cleary (pictured), managing director of Precise Mortgages, said: “Our buy-to-let calculator allows mortgage intermediaries to know how much their clients could borrow from us before they start the application process.
“They will also be able to compare and contrast different ways of setting cases up in order to achieve the best outcome.
“The calculator is similar to the one used by our underwriters to assess cases so it will save intermediaries and us time and effort. We believe that in the majority of cases a bespoke ICR will be superior.”