BTL affordability gap reaches £214,466

The gap between the maximum and minimum loan available to buy-to-let mortgage applicants has reached £214,466, according to Mortgage Broker Tools.

For buy-to-let customers, the average maximum loan was £346,153, while the average minimum loan was £131,687.

Meanwhile, the gap between the maximum and minimum loan available to residential borrowers is £99,475.

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The maximum loan available to residential applicant was £235,475, and the minimum loan was noted at £136,000.

Analysis of cases processed through the firm’s platform found that, whilst the residential market is subject to frequent changes in the affordability landscape, buy-to-let affordability has remained relatively stable.

However, the large spread between the average maximum and minimum available loans put greater emphasis on choosing the right lender to match a client’s loan requirements.

Tanya Toumadj, chief executive at Mortgage Broker Tools, said: “This data from MBT Affordability shows that the choice of lender for a buy-to-let client can make a huge difference to the size of loan they are able to access.

“Many investors are keen to maximise their leverage to make greater use of their capital, so it’s important that brokers are able to easily identify those lenders that can provide larger loan sizes for buy-to-let clients.

“Choosing the wrong lender could limit a landlord’s options and have a significant impact on the success of their investment strategy.

“So, carrying out thorough affordability research is just as important in the buy-to-let market as it is for residential clients – if not more so.

“The affordability landscape may be more stable in this part of the market, with fewer tweaks and changes to calculations, but the consequences of not choosing the right lender are more significant.

“This is why a technology platform like BTL Affordability is so important to any broker who works with landlord clients.

“BTL Affordability provides brokers with more complete coverage of the market with one, easy to use, calculator that gives accurate eligibility calculations based on the affordability calculators and criteria of 65 buy-to-let lenders.

“Brokers can carry out research for landlords buying as a limited company or in their own name and the results presented by BTL Affordability show how much an investor can borrow based on both the ICR of the property and whether they want to include top slicing from their personal income.”