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The Mortgage Works cuts select limited company rates and adds five-year fixes
The Mortgage Works (TMW) has reduced rates across select limited company mortgages by as much as 0.5 per cent.
The changes will apply from 7 September and includes a two-year fix at 75 per cent loan to value (LTV) which has gone down from 6.49 per cent to 5.99 per cent. At the same tier, a five-year fix has been reduced by 0.2 per cent to 6.59 per cent.
Both products have a three per cent fee.
The newly added products include a five-year fix for limited company borrowers at 70 per cent LTV with a 5.49 per cent rate. This has a five per cent fee.
The lender is also raising the rates on select 10-year fixes by 0.1 per cent, with rates starting from 5.49 per cent at 65 per cent LTV.
Daniel Clinton, head of specialist lending at The Mortgage Works, said: “We are pleased to announce these rate reductions, which we will be welcome news for landlords.
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“The swap rate environment has been improving recently, opening the door for us to reduce rates further, as we look to support buy-to-let investors with their cashflow and help unlock affordability constraints.”
A ‘lifeline’ for buy-to-let borrowers
Brokers commended TMW for its rate reductions and expressed hope that other lenders would also make improvements to their ranges.
Justin Moy, managing director at EHF Mortgages, said this was some of the most positive news for landlords in a while.
He added: “It’s ideal timing for many landlords who are now looking for a new deal for their properties. The balance of fees and rates has long been a tough discussion with landlords. Hopefully, this will see that issue subside a little, and this positivity spread to other lenders, too.”
Riz Malik, founder and director at R3 Mortgages, said: “There are notable discounts available for limited company borrowers, particularly those looking to secure rates for one to two years. Hopefully, this will ignite more competition in a sector that, so far this year, has had limited choices without exorbitant arrangement fees.
“This could be a lifeline for buy to let.”
Not just about rates
It was also suggested that other prohibitive features such as buy-to-let mortgage fees and stress tests could be introduced to offer further benefits to borrowers.
Elliott Culley, director at Switch Mortgage Finance, said while reductions were good news, the best rates tended to come with higher fees.
He added: “The stress testing performed by BTL lenders right now is key to further improvements in this space and, hopefully, we will see some improvements over the next few weeks.”
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management, said: “Finally some good movement in the buy-to-let space, even better as TMW are already sourcing at the lowest end of the market. Fees are still high for landlords, though, which needs to change for there to be an influx of business getting submitted.”
Darryl Dhoffer, mortgage expert at The Mortgage Expert, said borrowers should act now as the lower rates could be short-lived if inflation figures did not fall again on 20 September.
“It’s now very clear lenders are trying to fill their loan books, and these reductions are welcome. However, there are still high fees that remain a challenge for many landlords,” he added.