Changes to residential affordability

Mortgage

An update from TSB​

Article date: 12/06/2019


From today, TSB will now use 60% of the surplus rental income from self-funding Buy-to-Let properties in affordability calculations.

To be considered as self-funding, 69% of the total rental income needs to be greater than the total monthly payments of all background Buy-to-Let mortgaged properties. This is based on interest only at a stressed rate of interest of 5.5%.


Example:
If a customer has three background Buy-to-Let mortgage properties, with combined mortgage balances of £235,000 (all remaining outstanding at completion). The total rental income must be greater than £1560.99 per month:
(£235,000 x 5.5% / 12) / 69%

Any DiPs for pipeline applications that were started before 5 June, aren’t impacted by this change.

For more information, you’ll find the updated criteria guides on the TSB Intermediary website.

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