NatWest BTL do they need a higher rent:mortgage ratio?

Aiadi

Hi guys

Would be grateful if anyone had any info about this.

After a rocky start we seem to be proceeding with a BTL mortgage via a broker, for a flat in SW London. It was the only lender who would work for us according to the broker as we are non homeowners and husband's income, although high, his history is complicated mix of self employed and employed, and only been with his current job for 18 months.

We've been told by broker to expect NatWest to need a higher rent than other lenders - apparently they'll require rent of £1160/month on a £500/month interest only mortgage. This will likely mean they'll offer us less mortgage as rental income will probably be £1000/month. Is that about right? Annoying as we can easily afford to cover mortgage even with no rent at all, and I'd rather not put down more deposit (although we can afford it).

Thanks

Thrugelmir

Difficult to comment without all the facts. The higher rental requirement may well reflect the perceived higher risk from the underwriters perspective. People have a propensity to over rate their own financial position.

Aiadi

Don't think I am over rating our financial position. The broker told me that NatWest has a higher ratio than the usual 125% for all their BTL, not just mine. This is my question.

(Husband has a 6 figure salary, we have no other debts and excellent credit score plus we have 2k to spare each month after affordability figures so I don't think we're a risk)

WellKnownSid

I believe it's 125% cover but at a higher mortgage rate of 7%.

kingstreet

NatWest's online criteria;-

Rental cover - up to 10 loans

We use a rental cover percentage to work out how much your client can borrow.
All rental cover percentages are based on an interest rate of 125% at 7%.
Where at least one applicant individually earns a minimum of £50k pa, reduced rental cover of 100% @ 7% will be considered, provided they can meet the 25% difference from their own net free income. This will only apply if the applicant has less than 3 Buy To Lets (including the current application).