The average loan size offered to buy-to-let borrowers has plummeted in the last six months, according to analysis by Mortgage Broker Tools (MBT).

This comes as rising rates have pushed up stress tests and negated the benefit of stressing rental income at pay rate, which was previously available from some lenders.

MBT compared the loan sizes available based on typical calculations for three different tiers of rental payments as part of its research.

CEO at the broker platform, Tanya Toumadj, suggested there was “no surprise” that the loan sizes available to BTL investors have fallen in recent months.

She added: “Our data analysis has revealed the scale of change, particularly as the benefits of stressing rental income at the pay rate of the mortgage have now been eclipsed but the size of the rate increases.

“In the current environment, many landlords may be tempted to take uncompetitive product transfer rates offered by their lenders at the end of their existing deal, so it’s vital that brokers have access to a research platform that enables them to quickly and easily assess the options available to their clients, to prevent them from making a potentially expensive mistake.”

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