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Question
What is the Interest Coverage Ratio (ICR) test in buy-to-let mortgage lending?
1
The ratio of rental income to property value, used to determine the maximum LTV available for a specific property
2
A test of whether the borrower's total income (salary plus rental) exceeds their total debt payments by a specified margin
3
A government-mandated affordability test introduced after 2017 that applies only to portfolio landlords
4
A lender requirement that rental income must cover the mortgage payment at a stress-tested rate by a specified margin (typically 125%) — this constrains how much can be borrowed against any given property regardless of the borrower's other assets
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