West One Loans has launched a limited edition range with boosted debt service coverage ratio criteria to help landlords hit by rising interest rates to borrow more.  

The specialist lender says the products are aimed at “high-quality borrowers who are locked out of the market, or cannot borrow as much as they could 12 months ago because yields have failed to keep pace with rapidly rising mortgage rates”.  

Each of the four new five-year fixed-rate loans comes with a lower debt service coverage ratio of 100%, rather than the usual 125%, allowing landlords to borrow more.  

But the firm adds that while it has boosted its debt service coverage ratio criteria, landlords will still have to pass a rigorous underwriting process.  

It says the loans for purchase or remortgage of standard or specialist properties are as follows:  

• W1 Standard, with rates starting from 6.09% and a 5.0% fee  
• W1 Standard, with rates starting from 6.59% and a 2.5% fee  
• W1 Specialist, with rates starting from 6.29% and a 5.0% fee  
• And W1 Specialist, with rates starting from 6.79% and a 2.5% fee  

The lender says the increased leverage on these loans is further enhanced for houses in multiple occupation/ multi-unit freehold blocks and higher rate taxpayers where increased rental stresses ordinarily apply.  

It points out that, on a property yielding 3.5% to 4%, the maximum loan to value a landlord could achieve at an interest rate of 5.5% at 125% debt service coverage ratio, would typically be around 50%.  

But adds that on its new 100% debt service coverage ratio range, the maximum LTV would be 57%, “or potentially tens of thousands of pounds more depending on the value of the property”.  

West One Loans managing director of buy-to-let Andrew Ferguson adds: “Meeting a lender’s debt service coverage ratio requirements is the number one challenge facing landlords at the moment.  

“Base rate rises coupled with market volatility have shifted rates upwards of 5.5%. However, in many parts of the country yields haven’t yet caught up, leaving many high-quality borrowers with limited options at product maturity other than to accept high reversion rates or inject personal cash into the transaction to facilitate the remortgage.  

“By launching our new limited edition enhanced debt service coverage ratio range, we hope to help brokers’ clients meet this challenge and offer them the finance they need.  

“However, this doesn’t mean we are dropping our standard. In order to protect borrowers and to maintain the quality of our lending book, landlords will still have to go through the same bespoke and rigorous underwriting process they always do.”  

Separately, the lender has also launched a series of limited edition fixed-rate deals that have lower rates and higher fees to help borrowers who need to maximise loan size and affordability.  

The new range of two- and five-year fixed rates are available on standard and specialist properties, starting at 5.09%.