Coventry for Intermediaries has made it easier for people to borrow more by updating its residential affordability calculator and reducing its buy-to-let (BTL) reference rates.
It suggested that most residential applicants will be able to borrow more, subject to eligibility, with online affordability calculators able to give the exact amount.
The new BTL reference rates include 4.5% – previously 4.75% – for five-year fixed rates, for purchase and remortgage applications, or product pay rate, whichever is higher.
Also, there is 4.5% – previously 5% – for two- and three-year fixed and variable rates, for remortgages with no additional borrowing, or product pay rate, whichever is higher.
A rate of 5.5% – previously 6.5% – is available for two- and three-year fixed and variable rates, for purchases and remortgages with additional borrowing, or product pay rate +2%, whichever is higher.
Last month, the lender also added new functionality to its online system, enabling brokers to submit even more cases via the MSO platform.
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Cases submitted using this system typically go to offer one day quicker than non-MSO cases.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “These affordability changes will give many people a welcome boost to their borrowing.
“Our online calculators have now been updated, so brokers can just tap in a few numbers and easily find out how much their clients can borrow.
“We’ve also recently rolled out some great new features on our online system, making placing a case with us easier than ever.
“The significant investment in this technology and the enhancement to our affordability shows how we’re aiming to make business with us as simple as possible.”
The minimum rental income required for BTL applications is 125% or 145% of the mortgage payments, based on the applicable reference rate.
If all applicants are earning below £49,000 and declare themselves to be lower-rate taxpayers, the minimum rental income required will be 125% of the mortgage payment, based on the applicable reference rate.
If any applicant is earning above £49,000 or declares themselves to be higher-rate taxpayers, the minimum rental income required will be 145% of the mortgage payment, based on the applicable reference rate.
It means a basic-rate taxpayer receiving a rental income of £900 and opting for a five year fixed rate could now borrow £192,000 – previously £181,895 – subject to the 75% loan-to-value (LTV) limit.
