Coventry for Intermediaries has reduced its buy-to-let (BTL) stress rate.

The lender says the changes benefit those looking to purchase, remortgage, and port an existing BTL mortgage.

For all customer types, the new stress rate on a five-year fixed rate or higher will be 5.5% or the product rate, whichever is higher.

For pound-for-pound remortgages, the new stress rate on two- and three-year rates will be 5.5% or the product rate +0.1%, whichever is higher.

Meanwhile, for purchases, the stress rate on two- and three-year rates will be 7.0% or the product rate +2.0%, whichever is higher.

Coventry Building Society head of intermediary relationship Jonathan Stinton says: “We’ve recalibrated our BTL stress rate to reflect current market conditions, which may be of particular help to those looking for a pound-for-pound remortgage.”

“We’re committed to helping our intermediary partners look after their clients, and equally want to support the private rental sector to help provide homes for those choosing to rent.”

Peak Mortgages and Protection managing director Rhys Schofield comments: “It could be that normality may be resuming in the BTL world.”

“Since September, previously easy-to-finance deals have proved much trickier to place with a lender because the numbers and how lenders calculate whether a property is ‘self-funding’ just haven’t stacked up when the lenders ‘stress test’ whether potential rate rises would make a property not pay for itself.”

“Now that it doesn’t appear the world is going to end with rate rises, it’s great to see lenders working hard behind the scenes to make BTL mortgages easy to obtain. Tenants could also benefit from this as some landlords have genuinely had to increase rents just to get a case to fit on affordability. Reducing that pressure should hopefully help tenants.”

EHF Mortgages managing director Justin Moy adds: “The popularity of BTL mortgages over the past six months has been significantly lower than the preceding years, as rates have increased substantially and made it near impossible to place new cases without large deposits due to interest cover ratio (ICR) needs.”

“Lowering BTL rates and stress tests, while residential deals have moved in the opposite direction, shows that lenders need to bring competitive and, more importantly, workable deals to market to support the landlords looking to refinance or purchase.”

“Changes like this from the Coventry BS, and the Foundation Home Loans rate reductions launched today, go a long way to help brokers service their landlords’ borrowing needs, and look to get that market more positive and active.”