Top-Slicing – Overcome Weak Rental Yields to Increase Your Mortgage Borrowing Ability

The category: Buy to Let Mortgages

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Are diminishing rental yields limiting your Buy-to-Let mortgage capacity?

In the realm of Buy-to-Let mortgages, affordability is crucial, assessed by balancing rental income against the interest on the mortgage. Regulatory guidelines mandate lenders to ensure expected rental income falls within 125% – 145% of a notional interest rate.

Recent increases in mortgage rates have constrained borrowing for many landlords, obstructing equity release for property expansion and other endeavors.

The tightening approval process has not only impacted landlords but has also squeezed lenders’ profit margins. To address this challenge, an increasing number of lenders now embrace ‘Top-Slicing.’ This innovative approach allows lenders to consider applicants’ personal income to supplement borrowing when rental income falls short.

Embracing practicality, lenders now assess affordability across the entire financial landscape, not just the rental income of a single property. This ‘Top-Slicing’ strategy empowers landlords to enhance their borrowing capacity, fostering a more holistic and flexible approach to mortgage approvals.

Aston James Bespoke Mortgages