Coventry for Intermediaries has brought in a tiered buy-to-let interest coverage ratio system.
The ICR is 125 per cent if each applicant is a non-tax payer or basic rate taxpayer whose total gross annual income is less than £40,000.
ICRs will be 140 per cent for higher rate taxpayers or those earning more than £40,000 a year.
Previously the lender had an ICR of 140 per cent across the board.
The lender is also dropping its requirements for minimum income – previously £25,000 or £30,000 for joint applications.
Coventry for Intermediaries is also ending its need for a landlord to have been employed for at least 12 months.
Coventry for Intermediaries director of intermediaries Kevin Purvey says: “We’ve listened to and worked with intermediaries, and we think that a tiered ICR calculation – as part of our overall assessment – is the best way to adapt to the changing market.”
The lender will continue to stress at 5.5 per cent, or 5 per cent for fixed rate products of five years or longer.
