Redwood has made changes to its affordability criteria when lending to landlords with HMO properties.
The bank has removed automatic cost deductions in affordability assessments.
At the same time, it has introduced the option to use the higher 5% on products for two- and three-year fixed terms.
These changes have been designed to help landlords unlock more leverage when looking to refinance, release equity or fund new purchases.
According to Redwood, the change to cost deductions could release an additional £40,000 for landlords and facilitate a 6% LTV increase for refinancing a BTL.
The option to have a 5% fee on a lower rate fixed-term mortgage could also help refinance a large HMO through a bigger LTV.
“This is exactly the kind of market intervention that landlords need right now,” said Mark Dobson, head of business development (South and London) at Redwood Bank.
“My team in the South have already seen the benefits for our brokers and borrowers with notable increases in LTVs available.”
