It's 125% of monthly payment. Generally stressed at around 5%.
Although two big players in BTL sector recently went 145%. So won't be long till they all fall into line it's basically self policing. There are still 2 lenders for definite that will give you a BTL mortgage without you having to provide income proofs.
The difficulty poker players face is getting past the AML checks and showing where the money become they have came from.
I am dealing with a case just now we're my client has £860k equity looking for an interest only loan of £266k can't place it anywhere. So frustrating, finally thought I had managed it based on figures I took off him when I seen his payslips things took a turn for the worse. Still affordable but no longer meets criteria.
Well mine isn't but I'll leave it with you.
My BTL mortgages are also done on 125% of what the interest payments would be.
Lenders are getting ridic tight on regulations though. Asking for min incomes and going through your bank statements/spending even though your rental income pisses the min requirements.
What if you go through a period of no rental income? I'm not saying I agree with lenders but I understand the reasoning. Too many people take out BTL mortgages with bad advice because tehir situation hasn't be assessed properly.
I agree with lenders on this one too. They were far too relaxed with their BTL lending criteria in the first place which contributed to alot of investors being in negative equity and led to repossessions. The first every property I bought was for £100,000, I used a 5% deposit and self certified my mortgage by saying I was a professional sportsperson earning £120,000 a year! How things have changed.
Personally, the proposed changes from 125% of the mortgage payment to 140% won't affect me, the properties I have bought, looking to buy and suggesting to investors are all high yielding so the rental payments more than cover the proposed mortgage. Interestingly enough, I was asked to write a rental valuation last week to Yorkshire Building Society for one of the landlords who was looking to purchase new property.
Author