In order to meet the self financing calculation for Buy-to-Let mortgages, the rental income is required to cover the higher of 145% of the mortgage interest at initial product pay rate OR 145% of the mortgage interest at a notional rate of 5.5%. The self financing calculation must also cover the product fee if this is to be added to the loan.
Should the rental income be insufficient to meet the self funding calculation then the loan amount must be reduced to fit. Personal income may not be utilised to meet any shortfall in rental income.
For Buy-to-Let applications the valuer will provide an expected market rental value figure.