Landlord lending criteria tightens

Lenders are tightening their lending criteria to landlords according to reports in the Sunday Times.

Some lenders use a rate of interest based on the actual base rate whilst others use a stressed test figure which gives lenders the comfort of knowing that should rates suddenly rise that the landlord could still afford the repayments.

Woolwich will tighten it's lending criteria today Monday by borrowers being required to have their affordability to be calculated on a flat rate of 5.79%.  This means that the only lenders basing their lending criteria on the actual base rate are Clysedale and Yorkshire banks.

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