Buy-to-let lender The Mortgage Works (TMW) will offer a tailored approach to stress rates based on product term and type, rather than a flat rate.
TMW had updated it stress rate to 8.49 per cent as a flat rate earlier this month as an “interim measure to better protect landlord cashflows during a period of interest rate turbulence”.
Stress rates can vary between 6.64 per cent and 8.79 per cent depending on company structure and term.
For non-limited companies and limited companies with a product term of under five years a pay rate plus two per cent applies.
For non-limited companies with terms of five years or more, a pay rate plus 1.5 per cent is in place, whereas for limited companies this is a pay rate plus 0.5 per cent.
Non-limited companies on tracker and variable rates the stress rate is pay rate plus five per cent, and limited companies have pay rate plus four per cent.
The Mortgage Works removes BTL trackers
The lender added that it would temporarily withdraw its buy-to-let tracker range and lifetime variable products from tomorrow.
Daniel Clinton, head of The Mortgage Works, said: “Earlier this month we adopted an interim measure of applying a flat minimum stress rate for buy to let mortgages to better protect landlord cashflow during the period of interest rate turbulence.
“We have now reviewed our stress rates and we are moving to a more tailored approach based on the product type and term.”
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
