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Another buy to let lender moves to 145% rental cover calculation

The TSB is the latest buy to let lender to increase its interest coverage ratio for buy to let mortgages from 125 per cent to 145 per cent.

The change takes place from tomorrow, Thursday June 30.

For loans up to 65 per cent loan-to-value, TSB will charge 145 per cent or 5.0 per cent of pay rate, whichever is highest. For mortgages from 65.1 to 75 per cent LTV, TSB will require 145 per cent or 5.5 per cent of pay rate.

The lender says all applications still in the pipeline and dealt with by 8pm today, including accepted decision-in-principles, will not be impacted unless the decision-in-principle or the entire application is cancelled and a new submission is made at a later date.

“Today’s change will bring TSB in line with other lenders in the market” says a spokesman for the company. The TSB also confirms it has no plans to alter its interest rates as a result of the Brexit vote.

In recent weeks several others lenders - notably Nationwide's Mortgage Works - have adopted similar new rental coverage criteria.


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