BTL Stress Test
Lenders check if your rent covers the mortgage at a hypothetical "Stress Rate" (usually 5.5%+). Does yours pass?
Landlord FAQs
Why did I fail?
Lenders don't just check if rent covers the mortgage today. They check if it covers the mortgage if rates hit 6-7%. If your rent isn't 125-145% of that higher figure, they won't lend.
What is "Top Slicing"?
If your rent isn't high enough, some lenders allow you to use your personal income to bridge the gap. This is called "Top Slicing" and can save a deal that fails standard stress tests.
Should I use a Ltd Company (SPV)?
Limited Company mortgages often have more generous stress tests (usually 125% regardless of your tax band). This can often increase your borrowing power significantly compared to personal ownership.
Can I just raise the rent?
You can, but you are limited by the market value. Lenders will send a valuer to confirm the rent is realistic. If the valuer disagrees with your figure, the loan amount will be cut.