Barclays has announced it will stress test buy-to-let mortgages against a higher rate of 5.79% from next week.
Mortgage trade magazine Mortgage Solutions reports that previously the lender tested buy-to-let applicants against 125% of pay rate but will change this to 125% of the 5.79% nominal rate.
The new affordability rate will come into effect on Monday 19 May. Barclays said this would “ensure consistency across all of our products”.
A Barclays spokesperson said: "As a responsible lender we need to ensure customers can afford their mortgage payments and to withstand whatever may happen with the interest rates in the future.
"The new single affordability rate of 5.79% for all buy-to-let transactions ensures we are targeting the sector with the right proposition for the right customer."
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