NatWest using personal income to provide larger buy-to-let mortgages

by Aaron Strutt

Jan 07 2017

NatWest has changed the way it calculates maximum buy-to-let loan sizes following the introduction of the Prudential Regulation Authority’s new rules.

The bank has launched a more detailed mortgage calculator asking for information about rental incomes, personal salaries, and existing credit commitments.

In line with many of the other banks and building societies, NatWest’s new rental calculation is 145 at 5.5 rather than 125 at 5.5.  As a result, if a property generates £1,500 rental income each month, the maximum loan size has reduced from £261,818 to £225,705.

Aaron Strutt, product director at Trinity Financial, says: “In order to offer larger buy-to-let mortgages when properties are short on rent, the bank is taking personal income into consideration to boost the loan size. Although, any increased maximum loan will be linked to the old rental calculation.

“The buy-to-let market has changed following the rental income caps and it is getting harder to secure sufficient buy-to-let loan sizes, unless you have a good deposit or a larger salary, particularly for properties in London or the South East.”

NatWest’s maximum term is 35 years, or 30 years if the loan is more than £500,000. The minimum qualification income is £25,000 per annum, and the maximum loan-to-value is 75%.

For help to secure a buy-to-let mortgage, call Trinity on 020 7016 0790.