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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.”

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