The Mortgage Works (TMW) will reduce selected rates across its buy-to-let range by up to 0.95%, starting Saturday, 5th August.
The adjustments include a reduction of 0.65% for a 1-year fixed rate at 4.99%, available up to 75% loan-to-value (LTV), and a cut of 0.80% for a 2-year fixed rate at 4.99% with a 3% fee, up to 65% LTV.
A 2-year fixed rate at 6.59%, available up to 75% LTV, has been reduced by 0.95%, while the 5-year fixed rate at 5.14% with a 3% fee, up to 55% LTV, has been cut by 0.55%.
Additionally, the 10-year fixed rate at 5.39%, available up to 65% LTV, has been reduced by 0.50%.
These reductions could allow landlords to borrow up to 10% more, as stress rates are tied to buy-to-let rates.
Daniel Clinton, head of specialist lending at The Mortgage Works, said: “Following the rate reductions for our existing customers last week, we’re continuing to show our commitment to landlords with significant rate reductions for new lending.
“These reductions will help some landlords increase borrowing by 10%.”
Reaction
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“This can only be a positive sign from one of the biggest buy-to-let lenders in the UK. Clearly, they think the peak in rates has passed, and with volatility subsiding and the housing market, particularly the buy-to-let sector slowing, this will be a welcome shot in the arm for landlords. This size of rate drop should also shake up the market as where The Mortgage Works goes, others are sure to follow.”
Jamie Lennox, director at Dimora Mortgages:
“It’s great to see buy-to-let lenders reduce rates and landlords around the country who were considering selling up may breathe a sigh of relief. We hope to see more lenders follow suit to try and ignite the buy-to-let sector again before it reaches a crisis point.”
Wes Wilkes, NTWRK CEO at Net-Worth NTWRK:
“This is great news and The Mortgage Works should be applauded. This seems consistent with the view that the Bank of England may only have one rate rise left, if any, as the market is now pricing in peak rate before the end of 2023.”
Riz Malik, founder & director at R3 Mortgages:
“This is fantastic news for landlords who may have been feeling neglected. The Mortgage Works’ substantial drop in rates is particularly noteworthy, especially following the base rate hike we saw only yesterday. If other companies decide to emulate TMW’s approach, it could provide new opportunities for landlords who previously felt stuck without options. I’m optimistic that the upcoming weeks will bode well for the mortgage market, especially if the inflation data set to be released on the 16th paints a favourable picture.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“This is a positive step in the right direction for a buy-to-let market that has been badly broken by the higher rates and stress-test calculations lately. Hopefully, more lenders will follow suit shortly. Always interesting to see plenty of notice can be given ahead of rate reductions but not when the shoe is on the other foot.”
Elliott Culley, director at Switch Mortgage Finance:
“TMW has been leading the way with BTL rates this year, so it doesn’t surprise me that they are the first to offer much better rates in the market. The mortgage rates still have some way to go to help landlords, but this is a step in the right direction.”
Graham Cox, founder at SelfEmployedMortgageHub.com:
“With two-year swap rates falling steadily for the past few weeks, news of a 95 basis point cut in some of The Mortgage Works’ buy-to-let mortgage rates is a sure sign the inflationary ‘panic’ may be starting to subside.”
Ben Tadd, director at Lucra Mortgages:
This could signal a significant milestone in the start of rate reductions in the buy-to-et market, following those seen with residential rates in the past few weeks. Landlords up and down the country will be praying that TMW’s bold approach seen today triggers a domino effect with more lenders jumping on the bandwagon and slashing their rates.
“This is a welcome relief to landlords whose deals are due to end in the next 6-12 months and, assuming these new lower rates hold, they may not have to sell their investment properties when their current fixed rates end after all.”
Joe Garner, founder & managing director at Joe Garner Consulting:
“This is good news and it is likely more buy-to-let lenders will follow suit. However, the rates aren’t the problem, the issue for small-scale buy-to-let investors and accidental landlords is Section 24 of the Finance Act 2015.
“Good quality landlords are being unfairly penalised in a way that has paralysed the BTL market. Interest costs should be deductible, especially as landlords are tasked with upgrading their properties to meet energy standards.”
Kirsty Wells, director at Blueprint Mortgages & Protection:
“I hope BTL lenders will follow suit but think it’s unlikely in the short term.”
