Molo Finance has announced reductions in its buy-to-let stress rates across its two-year fixed and tracker products.

The lender said it has made the move too support those landlords looking for shorter-term fixed rate or tracker products with a view to benefitting from potential future rate decreases, while still achieving the levels of leverage required.

The changes are as follows:

• 2-year fixed rates: higher of pay rate, follow-on rate, or 5.50%
• 5-year fixed rates: pay rate
• Tracker rates: higher of pay rate plus 2%, follow-on rate, or 5.50%
• Variable rates: higher of pay rate plus 2% or 5.50%

Molo said the changes benefit borrowers – both in the UK and abroad – looking to purchase a property or remortgage, complementing the fixed price rate reductions announced on 23 January 2024.

The absolute stress rate percentage is subject to change if the Bank Rate increases or decreases.

Mark Michaelides, Molo’s VP of strategy, said: “Affordability has been one of the biggest challenges facing landlords over the past 12 months, so we’re delighted to announce a recalibration of our stress test to reflect current market conditions and help support the private rental market. We will continue to lend responsibly, providing confidence to brokers and borrowers alike.”