Welcome to Thinking Outside the Blog

Alan Kimber - Group Head of Sales

Published 26.10.2023

Top slicing can help landlords manage their buy to let properties with greater flexibility, allowing them to use disposable income to demonstrate the ability to meet financial stresses. Here’s how top slicing could help your customers:

1. Top slicing provides access to properties with lower rental yields

If the loan amount a landlord needs isn’t available because the rental income of the property doesn’t meet our minimum ICR requirement, we can consider using surplus portfolio income, earned income or a combination of the two to support the mortgage. The property must meet a minimum ICR of 110% when calculated at the pay rate of the chosen product to qualify for top slicing.

2. Top slicing can help landlords meet the rental calculation cover for short-term fixed-rate products

Say your customer doesn’t want to be tied in for a long period because of market volatility but rental income alone leaves them short of the loan amount needed to access a short-term fixed rate. With top slicing they could combine surplus portfolio income and earned income to reach the loan amount needed helping them secure a short-term fixed product.

3. Top slicing is fully integrated and automatically offered on buy to let applications

Simply select this on the decision result screen of the application. Note, we’re currently not accepting top slicing on remortgage applications.

4. Top slicing can be used on more than one application

If all parties to the loan are the same on each application then, you can apply top slicing across more than one application. If this isn’t the case any applications in progress must complete before another top slicing application can be submitted.

5. Shareholder’s income can be used rather than a director’s to calculate earned disposable income

Make sure the earners with the most disposable income, regardless of whether they’re shareholders or directors, are keyed as applicants 1 and 2.

If top slicing sounds like it could work for your customer, but you’ve got more questions, refer to our Top slicing explained flyer, our FAQs document or contact your local BDM. We’ve also got Live Chat and a dedicated broker support team at the end of the phone on 0800 116 4385, so plenty of ways to get in touch.