TSB Offers Cashback Across Buy to Let Range 1 TSB Offers Cashback Across Buy-to-Let Range TSB Offers Cashback Across Buy to Let Range 1 TSB Offers Cashback Across Buy-to-Let Range

TSB Offers Cashback Across Buy-to-Let Range

TSB has today (30 June) introduced a £250 cashback offer across all its buy-to-let products available directly and through TSB Intermediary.

The cashback will be paid to all landlords on completion of the mortgage, and is available on two, three and five-year fixed terms, as well as a two-year tracker.

The bank also made cuts across its buy-to-let range, with landlords looking for a two-year fixed rate now offered a 0.25 per cent reduction to 2.34 per cent, with a £1,995 product fee.

Those looking for a five-year fixed rate also get a 0.25 per cent rate cut to 3.14 per cent, with a £1,995 product fee.

Roland McCormack, mortgage distribution director of TSB, said: “Not only are we reducing rates, maintaining TSB’s competitive position in the market, but we are also bucking the trend by introducing £250 cashback across our buy-to-let range.”

Meanwhile, this week TSB also followed the lead of other lenders by increasing its buy-to-let interest coverage ratio from 125 per cent to 145 per cent.

For deals up to 65 per cent loan-to-value, it will now charge 145 per cent of five per cent, or the pay rate, whichever is highest. For mortgages up to 75 per cent LTV, it will require 145 per cent of 5.5 per cent or pay rate.

The changes take place from today (30 June) and will also apply to residential mortgage affordability if the borrower also has a buy-to-let loan.

Mr McCormack said the move brings TSB in-line with other lenders in the market. “We will continue to work with brokers, through our award-winning service, to best guide landlords through this change.”

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At the end of April, Nationwide Building Society’s specialist armThe Mortgage Works increased the rental cover requirement rate from 125 per cent to 145 per cent for all buy-to-let mortgage applications.

The following month, Newcastle Intermediaries also pushed its buy-to-let rental coverage ratio to 145 per cent on a reference rate of 5.5 per cent, up from 125 per cent on a reference rate of 5 per cent.

These moves are in response to new landlord tax relief rules, which will start to be phased in from April 2017.

At present, mortgage interest is fully tax deductible, but from April 2020 tax relief on mortgage interest will be limited to 20 per cent, meaning higher tax rate payers will pay more tax, as relief is reduced to the equivalent level of a basic rate tax payer.

Lea Karasavvas, managing director at Prolific Mortgage Finance, said it was no surprise to see another lender increasing their stress tests.

“We expect to see more lenders following suit over the coming weeks, given the pressure they are under,” he stated.

“Perhaps a sensible move right now for those landlords expecting to struggle with enhanced stress tests, would be to lock in now while some lenders are still operating off lower stress tests, or risk having their borrowing potential reduced when more lenders come in line with these increments.”

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