We are certainly seeing a preference for fixed rates at the moment and have seen a pronounced increase in demand for five year fixed rates since the introduction of the PRA regulations and the changes to lenders’ rental calculations. In fact, five- year fixed rates have been the top sellers at Property Hawk Mortgages so far this year.
Mortgage Trust has a 125 per cent interest coverage ratio (ICR) for basic tax payers with a stress rate of 4.00 per cent for the 5-year product and 5.50 per cent for the two-year product, so these products could be an excellent choice for landlord clients looking for achievable fixed rates during this period of changing affordability assessments. The ICR increases to 140 per cent for higher and additional rate tax payers
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