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29
APR
2016

The Mortgage Works changes lending criteria for Buy-to-Let mortgages

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The Mortgage Works is the first lender to tighten-up its lending criteria for buy-to-let mortgages following new guidance from the FCA.

From 11 May the lender’s rental coverage requirement will increase from 125% to 145% and the maximum loan-to-value allowed will be reduced from 80% to 75%.

To give an indication of  how the changed rental coverage requirement will affect borrowers, where the rental income of a property is £600 per month, the amount that could be borrowed will reduce from £105,000 to £90,000 (approximately).

Expect other lenders to follow suit over coming months.

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