Post date: 11th February 2020

ICRs reduced by up to 30% on certain types of specialist properties!

Great news for your buy-to-let clients, we’ve reduced our Interest Cover Ratio (ICR) for HMOs, MUFBs and Flats above Commercial properties – and also reduced our ICRs for New Builds.

Speaking about the changes, Paul Fryers, Managing Director at Zephyr Homeloans, said: “Zephyr’s new ICRs help landlords and property investors to borrow more than they could do previously — and benefit our intermediary partners by simplifying our criteria. The change further cements our position as one of the more competitive lenders available to UK landlords and demonstrates our commitment to the buy-to-let market.”

The changes explained…
This means the maximum amount we can potentially lend on Specialist and New Build properties has increased based on the same rental income – and we also now require a lower minimum level of rental income in order to lend on these types of property. To highlight the potential benefit for you and your clients, see the two examples below…


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Example 1: Borrowing a higher maximum amount: A Limited Company or Individual Lower Rate Taxpayer purchasing a £285k New Build flat (not above commercial), with a rental value of £800 PCM could previously have borrowed up to £158k on our 3.91% 5 Year Fixed Rate product.  Now they can borrow up to £196k on the same rate with our New Build LTV of 70%.

ICR EXAMPLE 1
Example 2:  Lending on a property with a lower rental income: A Limited Company or Individual Lower Rate Taxpayer looking to borrow £120k to purchase a New Build flat (not above commercial), on our 3.91% 5 Year Fixed Rate product at 70% LTV would currently need a minimum rental income of £607 PCM in order for us to consider this application. Now they would need £490 PCM.
ICR example 2