Concerns raised by the Bank of England (BoE) about underwriting in the buy-to-let (BTL) sector could be alleviated if more lenders offered longer term fixed-rate products, according to Foundation
Earlier this week, the BoE moved to tighten underwriting standards for BTL lenders, but Foundation Home Loans said matching mortgage repayments with rental charges over longer periods would provide greater certainty for both lenders and tenants.
Simon Bayley, Commercial Director, said: “The FPC (Financial Policy Committee) is right to look at underwriting standards and stress testing in BTL.
“Most of our products are geared towards fixed rates, and the tracker and variable rate products we offer are more than covered by our current rental cover calculators.
“We are very comfortable that our criteria is attractive to borrowers while we continue to be prudent, minimising the risk of overextension in our underwriting.
“With more new lenders coming to market, it is important that we all work to high underwriting standards, not compromised by the need to gain market share.”
Foundation currently offers a 4.39% five-year fixed product, as well as shorter fixed and tracker products.
It is also offering a pay rate product up to £500,000.
