Accord Mortgages has changed the interest coverage ratio it uses in its affordability calculations for residential borrowers who have a buy-to-let property with an outstanding mortgage.

From Wednesday this week, a BTL portfolio with rental income meeting 145 per cent of mortgage payments at a stressed rate of 4.5 per cent will be classed as self-financing and so not used in the affordability calculation.

This has been modified from 135 per cent and 5 per cent, respectively.

Any shortfall will be used in the affordability assessment where the ICR is not met, Accord adds.

The lender adds that this new rule applies to new and existing customers.

Accord Mortgages corporate account manager Nicola Alvarez says: “We’re confident this change to the ICR will help more landlords finance their residential property without the need to include their BTL portfolios in affordability assessments.”