According to the platform’s data analysis, a borrower with £750 per month in rent may now get a BTL loan of £106,000, based on the current calculations (125% at 6.79%) — £25,000 less than six months ago.

The differences are more striking for those with higher monthly rents — the average BTL loan size for clients with a £1,250 per month rental income is currently £177,000 (based on the standard stress calculation of 125% at 6.79%).

This is £41,000 lower than the loan size available six months ago, using the previous standard stress calculation of 125% at 5.5%.

Meanwhile, landlords with a £1,750 per month rental income may now get a BTL loan of £247,000, compared to £305,000 half a year ago.

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Comparison of BTL loan sizes available based on typical calculations for three different tiers of rental payments

Tanya Toumadj, CEO at MBT, said: “It’s no surprise that the loan sizes available to BTL investors have fallen in recent months, as rate rises have significantly impacted stress tests. 

“However, 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 by 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.”