Virgin Money has announces changed to the stress test rates used when assessing affordability for buy-to-let mortgages, which will please some of those calling for a rethink to what many people view as the anachronistic way mortgage applications are stress tested.
In a bid to allow more consumers to access the market, Virgin Money has reduced the interest stress test rate from 5% to 4.5% on fixed rate products of five years or more. The required rental cover remains at 145%.
Aside from the rethought and rejigged stress test criteria, rates on Virgin’s buy-to-let remortgages with no additional borrowing has also changed, having been cut from 5.5% to 5% at 125% of rental income.
Sarah Green, director of intermediary mortgages at Virgin Money, commented: “In line with the market we are offering reduced stress test rates across several of our products which demonstrates our ongoing commitment to supporting our intermediary partners and the buy-to-let market.”