Maximum buy to let mortgage following the 2017 PRA review

Published 31 December 2016 · Last reviewed 1 May 2026

How will the new Buy to Let criteria changes effect the Maximum buy to let mortgage offered by UK Lenders.

For those landlords looking to get the Maximum buy to let Mortgage we are certainly looking at a different landscape. The Prudential Regulatory Authority (PRA) has flexed its muscles and forced Buy to Let Mortgage Lenders towards a standardised approach to increase the rental coverage in preparation for future interest rate rises. 1^st January 2017 sees the implementation deadline of a minimum recommendation of 125% coverage based on a notional interest rate of 5.5%. With further changes to affordability behind the scenes expected by 30^th September 2017.

So what has been the fall out and how can you get the Maximum buy to let mortgage? Well most Buy to Let Mortgage Lenders have taken on board the sentiment, and in some cases gone a stage further, with 145% cover fast becoming an industry norm with greater background checks on overall affordability.

For example, prior to the changes you could have conceivably seen rental coverage 125% @ 3.99%, which based on a loan of £200,000 would mean a minimum rental of £832pcm. However now based on 145% at 5.5% the rental would need to be £1,330pcm. A massive hike.

As you would expect from Niche Advice we are versed to identify the best products for our clients’ advantage. For starters the PRA directive to Buy to Let Mortgage Lenders is to apply this stress test over a five year period so 5 year fixed rates avoid the need to factor in often high reversionary rates, and give Buy to Let Mortgage Lenders more comfort in using 125% than a higher buffer.

Furthermore, 145% factors are more likely to be applied by Buy to Let Mortgage Lenders to individuals in a higher rate tax bracket with 125% reserved for individuals on the lower band, and importantly limited company buy to lets which is a growing sector.

If the rental income coverage is still a problem then we have access to Buy to Let Lenders that are using the PRA tolerance to factor in earned income provided affordability is there, and in fact one Buy to Let Lender that only works on earned income.

There is also one Buy to Let that has regional rental coverage factors to help out the London market but whether this approach will be allowed to continue must be brought into question.

What is certain is the formulas to work out the Maximum buy to let mortgage products are no longer straight forward and the advice around Buy to let Mortgages will need to be much more tailored to each individual client. There are now multiple factors that no longer lend themselves to quick analysis via comparison site aggregators, so if you need assistance enlist the services of a Buy to let Specialist Mortgage Broker, such as Niche Advice.

To view some of our top Buy to Let Mortgage products please click here.

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Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. A small number of buy-to-let mortgages are FCA-regulated — typically Consumer Buy-to-Let (where the borrower is not acting in the course of a business, such as an accidental landlord who has inherited or moved out of a former main residence) and Family Buy-to-Let (where the property is let to an immediate family member). Limited-company buy-to-let, portfolio buy-to-let and standard personal-name buy-to-let are not regulated by the FCA.

Where the underlying mortgage is not FCA-regulated, the lender's conduct on that loan is not covered by FCA rules and you may have reduced access to the Financial Ombudsman Service for complaints about the lending decision or product terms. However, Niche Advice Limited is a Credit Broker authorised and regulated by the Financial Conduct Authority (FCA No: 750263), and our broking activity — including the introduction we make to the lender — IS FCA-regulated under the FCA's CONC rules. Complaints about our broking service can therefore be referred to the Financial Ombudsman Service in the usual way.