Background BTL portfolio

All background BTL properties within the portfolio, including unencumbered properties must collectively meet a minimum Interest Coverage Ratio (ICR) of 145% at a stressed rate of 5.25%.

However, for applications from basic-rate taxpayers, the background portfolio may be assessed using a reduced ICR of 125% at a stressed rate of 5.25%, subject to verification of the applicant's tax status.

How we assess coverage
When reviewing a BTL portfolio, each property is assessed individually. However, if a property does not meet the required ICR, we will consider the whole portfolio, where the surplus rental income from other properties in the portfolio is sufficient to cover the shortfall.