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BTL lenders are open for business as rate cuts dominate April – Armstrong

by: Cat Armstrong, mortgage club director at Dynamo for Intermediaries
  • 28/04/2023
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BTL lenders are open for business as rate cuts dominate April – Armstrong
We know that rate forms only part of any borrowing equation, especially when it comes to more specialist product types.

However, following a short period where some alarming rate trends really did drive client conversation, it’s great to be able to discuss rates in a far more positive sense.  

This is especially evident in a buy-to-let marketplace experiencing some healthy levels of competition which is being reflected from a pricing standpoint. So, let’s highlight some of the many rate reductions and launches seen over the past few weeks. 


Improved pricing 

Zephyr Homeloans reduced rates across its buy-to-let tracker mortgage range by 40 basis points. The lender is now offering a rate of 5.94 per cent on a lifetime tracker standard buy-to-let mortgage product at 65 per cent loan to value (LTV) for properties with an A to C-rated energy performance certificate (EPC) and 6.04 per cent on properties with an EPC rating of D or E. 

For houses in multiple occupation (HMOs) and multi-unit freehold properties with an A to C EPC rating, tracker lifetime mortgage rates now start at 6.14 per cent, rising to 6.24 per cent on properties with an EPC rating of D or E. 

Family Building Society cut rates across its buy-to-let product range. Its five-year fixed rates fell by 0.20 per cent, now starting at 5.84 per cent with a £999 product fee. For limited company special purchase vehicles (SPVs), five-year fixed rates decreased by 0.3 per cent, starting at 5.74 per cent with a two per cent product fee. In addition, expat buy-to-let discount rates have been reduced by 0.25 per cent, now starting at 5.99 per cent. 

The Mortgage Works (TMW) lowered rates on selected products across its range by up to 0.5 percentage points. Across its standard buy-to-let range, the largest reduction was to a five-year fixed rate at 75 per cent LTV, now available at 4.19 per cent with a three per cent fee. In addition, a two-year fix and five-year fix at 65 per cent LTV have reduced to 3.69 per cent and 3.99 per cent respectively, both with a three per cent fee. 

Foundation Home Loans reduced rates on its two and five-year fixed-rate specials at both 65 per cent and 75 per cent LTV. F1 and F2 fixed rate specials have been reduced by up to 0.70 per cent. The specialist lender’s two-year fixed rate HMO special has been cut by 0.75 per cent to bring this in line with its F2 buy-to-let product offering.  

Standard buy-to-let fixed rates now start from 5.29 per cent, with HMO specials now starting from 5.34 per cent. 


Product launches 

Focusing on new products to the market, Foundation also launched a limited edition buy-to-let five-year fixed rate at 5.39 per cent with a flat fee of £4,995, available up to 75 per cent LTV and maximum loan of £1.5m. 

Molo Finance expanded its buy-to-let product range with new products for multi-unit freehold blocks (MUFBs), designed to cater for properties with up to six units. 

Hampshire Trust Bank (HTB) introduced a special edition 5.99 per cent five-year fixed rate buy-to-let product for loans between £100,000 to £1m. The product has a five per cent arrangement fee which can be added to the loan. The minimum interest coverage ratio (ICR) and early repayment charges (ERCs) are standard. 

Landbay presented a new range of limited edition five-year fixed rate buy-to-let mortgage products starting at 4.99 per cent. The new range offers only three years of ERCs, allowing borrowers to redeem the mortgage in years four and five if they wish with no penalty. 

It is also beneficial for stress testing purposes as the ICR on five-year fixes is calculated at payrate. The new five-year rates are available at 75 per cent LTV and start from 4.99 per cent with a five per cent fee, 5.19 per cent with a four per cent fee, 5.39 per cent with a three per cent fee, and 5.59 per cent with a two per cent or £1,999 fee. 

That just about wraps it up for yet another busy product-related month. Let’s hope that these positive moves help to generate some additional business for intermediaries across the UK. 

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