Changes to Buy to Let stress rate made by The Cambridge

30 January 2018 • Products & Services

The Cambridge Building Society has made changes to the stress rate used for its 5 year Fixed Rate Buy to Let mortgage.  Applications will now be assessed using a stress rate of 4.49%, which is the current pay rate plus 1.5%, with rental coverage of 140% (dropping to 125% for like for like remortgages).  Previously it was calculated at a flat 5.5%.

This change, combined with a competitive product, demonstrates an ongoing commitment to landlords and the rental market.  It will particularly appeal to existing landlords looking to remortgage or add other properties into their portfolio. Tenants are also supported as they are less likely to see rental payments increased to provide the extra cover.

For landlords with a portfolio of properties, the stress rate is only applied to the mortgage on the property concerned, not others in the background.  There is also no limit on the number of properties in the portfolio.

Duncan Turner, Business Development Manager comments; “This change is something our intermediary partners have been requesting for a while now and further shows our commitment to this market.  Our competitive 5 year product already has low fees and comes with a remortgage package of a free valuation and legals, so this is another positive change.  Even though interest rates are at all time low, many landlords are looking for the stability a long term fixed product provides and we feel that we’ve got an attractive proposition.”

Liam Flaherty, Underwriting Manager adds; “My experienced team manually underwrite cases allowing us more flexibility and time to look at cases on an individual basis.  This type of change illustrates the way we are continuing to take feedback from intermediaries into consideration when making amends to our criteria.  But the improvements won’t stop there as we have other changes we’re looking at over the next few months that will offer even more options to landlords and the intermediaries who support them.”