A new buy-to-let affordability calculator, which allows brokers to simply input basic borrowing requirements to see the maximum loan available on two-year and five-year fixed and Libor trackers in one view, has been launched by Magellan Homeloans.
The calculator shows Magellan’s approach of blending ICRs, reflecting borrowers’ individual tax positions, can be used for both personal name buy-to-lets and buy-to-lets in a limited company and flags where borrowers may be able to borrow a higher amount if they apply through a limited company.
It can also produce the rate and monthly payment quicker than most and display it in one view that can be printed.
Simon Read, managing director of Magellan Homeloans, said: “In its format this is an industry first. It’s for the ease of the broker, taking a couple of clicks rather than a whole morning working out calculations. Part of our job is to find ways to make life easier for our partners.
“When a low rate and a high rate taxpayer get a buy-to-let together lenders penalise the low rate taxpayers by stress testing on the high rate taxpayer.
“We offer affordability based on actual tax position, not workplace scenario. It’s fair, only paying tax on income. It’s fantastic and the way the market will go. Borrowers can take advantage of having a lower taxpayer on the mortgage. It’s a benefit for borrower reflecting their actual circumstances.
“For us it’s a real step forward and I hope it makes a difference and makes life easier. I think we’ll see lot of other lenders follow suit with a similar calculator and blended ICRs which we believe are the only way forward for individual borrowers.”