Income criteria

Minimum income
Stress rates and interest cover ratio
Interest Cover Ratio
Income proofs

Minimum income

There is no minimum personal income requirement, however, proof of personal income may be requested to support an application. This will be used with other information relating to the landlord and property, to validate that the loan will be used for its intended purpose.


Stress rates and interest cover ratio (ICR)

To reflect the different taxable income levels of landlords, we apply the following Interest Cover Ratios (ICR) and Stress Rates:

ICR
Buy to Let and Let to BuyHMO
Tax rate of 20% or less*Tax rate of 40% or more
125%145%170%

*21% or less in Scotland

Stress rateProduct term under 5 yearsFixed rates 5 years and over
65% LTV and lower65% LTV to 75% LTVover 75% LTV
Remortgage (without capital raising)4.99%5.50%4.99%
All other application types5.50%5.99%

Exceptions apply:

  • For remortgage applications without capital raising and fixed rate product terms of 5 or more years, the higher of stress rate or product pay rate (product pay rate + 0.50% for variable products) will apply.
  • For all applications, the higher of stress rate or product pay rate + 2% (whichever is higher) will apply.
  • For existing customers switching products, no rental assessment will apply.

For remortgages, we'll apply the lower of the current rent or estimated rental value as given by the valuer. Rental income denominated in a currency other than pounds sterling (GBP) isn't accepted.

For further advances, individual loan elements will be stressed separately in line with the above.


Interest Cover Ratio

125% ICR

  • Landlords must be lower rate tax payers (gross income of £46,350 or less in England/Wales or £43,430 or less in Scotland) upon completion of the mortgage.
  • Landlords must have no more than 3 rental properties (with or without a mortgage), including any TMW applications in progress.
  • For purchase and Let to Buy applications, 75% of the proposed gross rental income will be added to current gross income to account for the increase in taxable income. For joint applications, half of the 75% proposed gross rental income will be added to the current gross income for each applicant.
  • Proof of income will be required in the form of a SA302 or tax calculation see table below

145% ICR

  • Applies to landlords who don't meet the criteria above

170% ICR

  • Applies to HMO applications, regardless of tax status

View the portfolio landlords rental calculations and maximum LTVs on our dedicated Portfolio landlord criteria page.


Income proofs

Income proofs will be required for landlords using the 125% ICR and may be requested for applications with a 145% ICR or higher (e.g. if there's high levels of unsecured debt, Nationwide Group BTL exposure over £1m).

Acceptable income:

  • Gross earned income (excluding bonus, overtime and commission)
  • Pension income

Acceptable proof of income:

Landlord Type Income type Proof
Experienced Landlord Self Employed Tax Calculation & Tax Year Overview*
Employed/Retired
First Time Landlord Self Employed
Employed/Retired Latest payslip/pension statement
No Taxable Income 3 Months Bank Statement

*if SA302 isn't available, an accountant's reference can be accepted. Please contact us with the accountant's details so we can request this.