If you’re a UK landlord or homeowner with an existing Birmingham Midshires mortgage, you may have come across the term “1.1” when exploring your product transfer or remortgage options. Understanding what this figure means and how it applies to your mortgage deal is essential, especially as we move into 2025 and lenders continue to adjust their rates and criteria. In this guide, we’ll answer common questions about the 1.1 figure and its role in Birmingham Midshires and BM Solutions mortgage products.
What does 1.1 mean in a Birmingham Midshires mortgage context?
The term “1.1” typically refers to a stress test ratio used by lenders like Birmingham Midshires (BM Solutions) when assessing affordability for buy-to-let mortgages. In this case, 1.1 means that the expected rental income must be at least 110% of the mortgage interest payments. This ratio is especially relevant for landlords with lower-rate mortgage products or those looking to do a BM Solutions product transfer. The 1.1 stress test is generally applied to limited company buy-to-let applications, where lenders are more flexible with income coverage requirements compared to personal applications.
Why is the 1.1 stress test important for landlords?
The 1.1 stress test is crucial because it determines whether your rental income is sufficient to support the mortgage under lender criteria. For landlords, especially those with properties held in a limited company structure, this lower stress test threshold can make it easier to qualify for a new rate or complete a Birmingham Midshires remortgage. In 2025, with interest rates still fluctuating, lenders are using these stress tests to ensure responsible lending while still enabling landlords to access competitive deals. Understanding the 1.1 ratio can help you plan your portfolio growth and refinancing strategy more effectively.
Who qualifies for the 1.1 stress test with Birmingham Midshires?
Typically, the 1.1 stress test is applied to limited company buy-to-let mortgage applications. If you’re applying through a limited company structure, BM Solutions may assess your rental income at 110% of the mortgage interest, rather than the higher 125% or 145% often used for individual landlords. This can be particularly beneficial for portfolio landlords looking to maximise borrowing capacity. However, eligibility can depend on your overall financial profile, the property type, and whether you’re doing a product transfer or full remortgage. Always speak with a specialist broker to confirm your eligibility under the latest 2025 criteria.
Can I do a product transfer with Birmingham Midshires under the 1.1 rule?
Yes, if you’re an existing customer of Birmingham Midshires, you may be eligible to complete a BM Solutions product transfer using the 1.1 stress test criteria, particularly if your mortgage is held in a limited company name. Product transfers typically do not require a full affordability assessment, but the 1.1 ratio may still be used as a guideline when reviewing your suitability for certain fixed-rate or tracker products. Product transfers are a popular choice in 2025 as they often involve no legal fees or valuations, making them a cost-effective way to secure a better rate.
How does the 1.1 stress test compare to other affordability ratios?
Most lenders in the UK use stress test ratios between 125% and 145%, depending on whether the mortgage is held personally or through a limited company. The 1.1 (or 110%) ratio used by Birmingham Midshires for limited company applications is among the most generous in the market. This lower threshold allows landlords to borrow more against the same rental income, which is especially useful in higher-value areas or for refinancing larger portfolios. As we move into 2025, this competitive edge continues to make BM Solutions a preferred lender for professional landlords.
Will the 1.1 stress test still apply in 2025?
While lending criteria can change, the 1.1 stress test remains in place for limited company buy-to-let mortgages with Birmingham Midshires as of early 2025. However, it’s important to monitor the market and consult with a broker regularly, as lenders may adjust their policies in response to economic conditions or regulatory changes. If you’re planning a remortgage or product transfer this year, understanding how the 1.1 ratio affects your borrowing power can help you make timely and informed decisions.
Is the 1.1 ratio used for personal buy-to-let mortgages?
No, the 1.1 stress test is generally reserved for limited company applications. For personal buy-to-let mortgages, Birmingham Midshires typically uses a higher ratio—often around 125% or more—depending on the applicant’s tax rate and the product type. This is because personal mortgages are subject to different tax treatments and risk assessments. If you’re unsure which structure is best for your property investment strategy, it’s worth comparing the benefits of personal vs. limited company ownership with a qualified mortgage adviser.
In summary, the 1.1 stress test is a key factor in unlocking better borrowing potential for landlords using limited company structures. Whether you’re considering a Birmingham Midshires remortgage or a BM Solutions product transfer, understanding how this ratio applies to your situation can help you make smarter financial decisions in 2025. To explore your options and stay up to date with the latest Birmingham Midshires mortgage products, browse our expert guides and speak with a specialist broker today.
