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Another lender increases BTL rental calculation to 140%

With impending changes to mortgage tax relief for landlords set to have an adverse impact for many buy-to-let investors, Coventry Building Society has decided to increase its buy-to-let rental calculation from 125% to 140%.

The buy-to-let rental calculation by Coventry for intermediaries will be done by using the reference rate, which remains unchanged, or current product pay rate, whichever is higher.

The new calculation will be applied to all buy-to-let mortgage applications submitted from 8pm on Wednesday 13th July.


Coventry is the latest in a long line of lenders making adjustments to its lending policy, TSB, Newcastle Building Society, Barclays, and Foundation Home Loans having all recently increased their buy-to-let interest coverage ratio to 145%.

Kevin Purvey, director of intermediaries at Coventry Building Society, commented: “With the upcoming changes to mortgage tax relief for landlords, there will be a detrimental impact for many buy-to-let investors. We have made the decision to adjust our rental calculation to ensure that applicants can afford their mortgage both now and in the future.” 

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