OneSavings Bank revamps ICR requirements

OneSavings Bank revamps ICR requirements

OneSavings Bank has made changes to its interest coverage ratio (ICR) requirements for all buy-to-let loans through trading brands Kent Reliance and InterBay Commercial.

The changes simplify ICR requirements, possibly increasing the amount customers could borrow against their buy-to-let property.

A summary of the simplified approach includes:

  • 140% ICR requirement for an individual with standard buy-to-let property
  • 160% ICR requirement for an individual with specialist buy-to-let property
  • 125% ICR requirement for a limited company with standard buy-to-let property
  • 145% ICR requirement for a limited company with specialist buy-to-let property

The definitions of standard and specialist property are unchanged. Standard buy-to-let properties include single dwellings, HMO/student/multi-let properties that have five or fewer rooms, and freehold blocks with four or fewer residential units.

Specialist buy-to-let properties include HMO/student/multi-let properties with six or more rooms, and freehold blocks with five or more residential units.

Adrian Moloney, sales director at OneSavings Bank, said: “Not only will these changes simplify the buy-to-let loan process and improve understanding amongst our brokers and their clients, but this simplification could also mean the opportunity for landlords to borrow more should they need to.”