Skip to main content

Maximum rental cover ratios and stress rates


2 year fixed – stress rate 5.5%


Basic rate taxpayer

Higher rate taxpayer

Additional rate taxpayer


125%

135%

138%


Example – purchase price £200,000, 75% loan, £150,000

Basic rate taxpayer – 150,000 x 5.5% x 125% = rent required £860 pcm

Higher rate taxpayer – 150,000 x 5.5% x 135% = rent required £928 pcm

Additional rate taxpayer – 150,000 x 5.5% x 138% = rent required £949 pcm


3 year fixed – stress rate 5.5%


Basic rate taxpayer

Higher rate taxpayer

Additional rate taxpayer


125%

136%

139%


Example – purchase price £200,000, 75% loan, £150,000

Basic rate taxpayer – 150,000 x 5.5% x 125% = rent required £860 pcm

Higher rate taxpayer – 150,000 x 5.5% x 136% = rent required £935 pcm

Additional rate taxpayer – 150,000 x 5.5% x 139% = rent required £956 pcm


5 year fixed – stress rate 5.25%


Basic rate taxpayer

Higher rate taxpayer

Additional rate taxpayer


125%

138%

141%


Example – purchase price £200,000, 75% loan, £150,000

Basic rate taxpayer – 150,000 x 5.25% x 125% = rent required £821 pcm

Higher rate taxpayer – 150,000 x 5.25% x 138% = rent required £906 pcm

Additional rate taxpayer – 150,000 x 5.25% x 141% = rent required £926 pcm

Rental cover ratios are based upon current highest product rates of 2.75% 2 year fixed, 3% 3 year fixed, 3.49% 5 year fixed.

These are examples only – use the BM Solutions Online Rental Calculator to get a tailored decision for your client.

For the use of mortgage intermediaries & other professionals only

If you do not have professional experience, you should not rely on the information contained on this site. If you are a professional and you reproduce any part of the information contained on this site, to be used with or to advise private clients, you must ensure it conforms to the Financial Conduct Authority's advising and selling rules.

These pages are for the use of those people who are resident and ordinarily resident in the UK and should not be regarded as an offer or invitation to sell Mortgage products in any jurisdiction other than the UK.

Birmingham Midshires is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered office; The Mound, Edinburgh, EH1 1YZ

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 169628. Telephone number 0345 850 5000. Telephone calls may be monitored or recorded.

Financial Adviser - Service Awards 2016

House Purchase
Remortgage
First Time Buyer
Existing Mortgage Customers only
Available for further borrowing
Further Borrowing only
Only available with BM Conveyancing
Calculate Borrowing
Click the ? icon to show help with using this Calculator