Birmingham Midshires Revamps Buy-to-Let Stress Rate Tests
In a move welcomed by the property investment community, Birmingham Midshires (BM Solutions) has announced significant changes to its buy-to-let stress rate tests at the application stage, effective from today, Tuesday the 16th of January 2024. These modifications are poised to make a positive impact on buy-to-let owners, enhancing affordability and accessibility to mortgage products.
Changes to Buy-to-Let Stress Rate Tests
The key change introduced by BM Solutions involves a reduced minimum stress rate for all 2-year applications. For purchase, remortgage with capital raising, and further advances, 2-year fixed and tracker products will now be subject to stress tests at 5.5% or the pay rate + 2%. Notably, for Like-for-Like remortgages in the Buy To Let / Let To Buy category, 2-year fixed and tracker products will undergo stress tests at 5.5% or the pay rate + 0.5%.
Further Advance Mortgage on Buy-to-Let
A notable condition for further advances to qualify for 5-year stress rates is that the total loan, inclusive of all existing balances, must be fixed for 5 years or more at the point of application.
This move by BM Solutions aims to provide greater flexibility and affordability for buy-to-let investors, aligning with the evolving landscape of the property market in 2024. The decision to reduce stress rates on 2-year applications is anticipated to positively impact the financial burden on investors, making it more feasible to secure financing for their property ventures.
Advisor Reaction to the News
Jade Pinkerton, Senior Mortgage and Protection Advisor at Oportfolio, expressed her enthusiasm for the announced changes. She stated, “THIS IS MUCH BETTER! It’s almost like it was a couple of years ago… not quite, but almost. BM solutions reducing their stress rates not only provides our clients with more borrowing options, but also bodes well for the entire buy-to-let industry. It looks like confidence is returning to the market. Hopefully more lenders will follow in BM’s footsteps.” Pinkerton’s excitement reflects the sentiment among mortgage advisors who believe that these adjustments will be a welcome relief for investors, reminiscent of a more favourable lending environment in the recent past.
Speak to a Buy-to-Let Mortgage Advisor in 2024
By offering more competitive stress rates on 2-year applications, BM Solutions is positioning itself as a lender that is attuned to the challenges and aspirations of buy-to-let owners in 2024. As the property market continues to adapt to changing economic conditions, such initiatives by key players like Birmingham Midshires are essential for sustaining growth and fostering a buy-to-let investment environment. If you or anyone you know is interested in buy-to-let investment, then please feel free to give our team a call today. We are here to help.
