New Street offering larger buy-to-let mortgages for properties in London
New Street Mortgages has launched into the UK market providing landlords with larger buy-to-let loans when they purchase properties in London.
Buy-to-let lenders regularly use a rental income stress test calculation of 125% at a rate of 5.5% to work out how much they will offer landlords when they require a mortgage. For some properties, New Street's calculation is considerably better at 115% at 5%.
If a property generates £2,000 rent each month landlords will typically be able to borrow up to £350,000. However, they could potentially secure up to £417,000 through New Street, providing the property is in Inner London or Greater London and it is worth more than £390,000.
Aaron Strutt, product manager at Trinity Financial, says: “It is unusual for a bank or building society to offer such an attractive rental calculation and provide four tiers of rates that get cheaper depending on the client's financial situation and the location of the property.
“Landlords have been asking for mortgages with better rental calculations in London for some time. New Street can even take a client’s personal income into consideration to offer larger mortgages.”
Landlords will need a minimum income of £25,000 to qualify. They can secure a lower rate if they have a single or combined income of £100,000 each year.
If the rental income meets the stress test of 175% at 5% clients will able to secure the most competitively priced mortgages rates.
There is a maximum loan size of £1 million for mortgages below 75% loan-to-value and a maximum loan of £500,000 for mortgages below 75% loan-to-value.
First-time landlords and clients looking to raise capital particularly in London and the South East will be accepted.
Buy-to-let rental calculations
For properties in Inner London and Greater London, the rental calculation is one of the most generous in the industry. If the property has a minimum value of £390,000 the rental calculation is 115% of 5% or the pay rate, whichever is higher.
The standard rental cover if the minimum property value is £120,000 is 125% of 5% or the pay rate, whichever is higher. This is available on all properties in England, Wales and mainland Scotland.
Rental cover for properties in the South East with a minimum property value of £250,000 is 120% of 5% or pay rate, whichever is higher. It is available on properties in Berkshire, Buckinghamshire, Hampshire, Isle of Wight, Kent, Oxfordshire, Surrey and Sussex.
For help to secure a buy-to-let mortgage through New Street, call Trinity on 020 7016 0790.