The Mortgage Works reduces ICR for low rate taxpayers

The Mortgage Works has cut its interest cover ratio for buy-to-let lending to lower rate taxpayers from 145% to 125%.

The reduction will apply to those paying no tax and basic rate tax on income, but there will be no change to policy for landlords who meet the higher 145% ICR.

Landlords’ maximum portfolio size on completion of new applications is three properties.

Paul Wootton, managing director of specialist lending at The Mortgage Works, said: “We are taking steps to make sure that those buy-to-let borrowers who are paying tax at the lower rate see that reflected with appropriate measures of affordability.

“The Mortgage Works, as part of Nationwide, already robustly assesses the affordability of its buy-to-let mortgages against stress rates that are higher than the borrower’s existing rate, and wanted to take a more flexible approach for those borrowers unaffected by the incoming tax relief changes.”

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.