Leeds Building Society has cut its interest cover ratio for landlords who are basic rate taxpayers.

The UK’s fifth-largest mutual says its ICR falls to 125 per cent from 145 per cent for buy-to-let mortgages for these types of landlords.

Leeds Building Society head of intermediary distribution Martese Carton says: “This change will benefit existing and potential BTL landlords who don’t pay tax at a higher rate.”

Carton adds: “It means our BTL mortgages are now tailored to each customer’s tax situation, are more accessible to those who are basic rate taxpayers, and makes BTL more affordable for these landlords buying, remortgaging or borrowing additional funds.

“We continue to take a flexible and common sense approach to our product offering, reaffirming our commitment to the intermediary market.”

The mutual says ICR for higher rate taxpayers remains at 145 per cent. It adds for additional rate taxpayers, ICR is 150 per cent, while the ICR for all Holiday Let applicants remains at 145 per cent.

In December, the lender relaunched its fee-free BTL mortgages.

They are offered at up to 60 per cent loan to value, at a two-year fix at 2.04 per cent and a five-year fix at 2.14 per cent.

Both products come with a free standard valuation and charge no fee.