Virgin Money widens Rate Reducer distribution; TMW improves affordability – round-up

Virgin Money widens Rate Reducer distribution; TMW improves affordability – round-up

The range at Virgin Money offers reduced mortgage rates to borrowers purchasing a new-build home, and is open to both first-time buyers and homemovers. 

It is available through more than 60 housebuilders, including Barratt Homes, Persimmon, Taylor Wimpey, Bellway and Berkeley Homes. 

Rates as low as less than one per cent are available through the offering. 

It works by investing housebuilder incentive budgets back into the mortgage upfront to lower initial repayments. These usually account for five per cent of the property purchase price. 

Craig Calder (pictured), head of secured lending at Virgin Money – which recently upped select rates – said: “Virgin Money is delighted to be a founding lender of the innovative Own New Rate Reducer, making it easier and more accessible for customers to afford a new-build home.

“Buying a home is a major life event, and this first-of-its-kind mortgage product will help customers feel happier about their big purchase, knowing that with the homebuilders’ incentive included, they have the certainty of a much lower fixed interest rate over the initial period of the mortgage.” 

 

The Mortgage Works amends affordability criteria 

The Mortgage Works (TMW) has reduced its interest coverage ratio (ICR) calculations to improve affordability for borrowers. 

For higher-rate taxpayers, the ICR will fall from 165 per cent to 160 per cent. For limited company borrowers and lower-rate taxpayers, this will be reduced from 130 per cent to 125 per cent. 

The lender is also lowering the existing portfolio rental calculation stress rate from five per cent to 4.5 per cent. 

Joe Avarne, senior manager of buy-to-let (BTL) mortgages at TMW, said: “We regularly review our affordability policy to ensure borrowing is sustainable for our landlords.

“With these latest changes, we’re pleased to be able to reduce our ICRs so that landlords can borrow more and achieve their BTL aspirations.” 

TMW makes four govt suggestions for ‘stronger private rented sector’

TMW makes four govt suggestions for ‘stronger private rented sector’

These suggestions have been made ahead of the Spring Budget next week, with the lender saying increased regulation and taxation was causing landlords in the private rented sector (PRS) to struggle. 

It said that, along with higher interest rates, landlord incomes were falling and resulting in increased rents as well as fewer funds to improve homes. TMW said this would impact the effort to make properties more energy efficient. 

The lender, which reduced rates last year, said these circumstances were making things worse for tenants. 

TMW’s proposals include a moratorium on all new regulations in the PRS, except for what is necessary after the Renters Reform Bill has been introduced. 

It said landlords had faced a “barrage of regulatory changes” and requested the Renters Reform Bill be passed as soon as possible. It said there should then be a period for changes to be made. 

TMW said a moratorium would give landlords certainty, give them time to improve homes and allow the government to assess the impact of the bill. 

Landlords should also be incentivised to make their properties greener, as TMW said failing to do so would negatively impact tenants and make the climate crisis worse. 

It said energy performance improvements should be deductible against rental income for tax purposes. 

The lender also suggested increasing funding for social housing and ensuring there was enough to deliver 90,000 additional homes each year into the sector. 

It was also proposed that the government review changes made to mortgage interest relief and landlord taxes. TMW said the Treasury should look at the impact of getting rid of mortgage interest relief and consider bringing it back to prevent landlords from leaving the sector due to costs. 

TMW said the three per cent stamp duty surcharge on landlords should be reviewed as it was a barrier to new landlord entrants, potentially stopping them from providing more rental homes. 

 

Current landlord taxation is ‘counterproductive’

Damian Thompson (pictured), director for The Mortgage Works, said: “Landlords are a partner for the private sector and the government in driving the economy forward. The PRS provides homes for where the UK workforce is needed most. However, the current taxation system is counterproductive, hampering progress within the UK economy, and negatively impacting tenants and landlords.  

“Without the government permitting landlords to offset mortgage interest against their rental income or making equivalent interventions, tenants will face reduced choice, increased rents and potentially less well-maintained homes, and the UK economy will suffer as a result.” 

TMW, Quantum and Newcastle BS make BTL rate reductions – round-up

TMW, Quantum and Newcastle BS make BTL rate reductions – round-up

Pricing now starts at 3.84 per cent, which applies to its two-year fix at 55 per cent loan to value (LTV) with a three per cent fee. 

At 65 per cent LTV, the two-year fix with a £3,995 fee has been reduced by 0.05 per cent to 3.99 per cent. 

TMW’s three-year fix with a £1,495 fee has been cut by 0.1 per cent to 4.39 per cent, while the five-year fix has been lowered by 0.15 per cent to 4.49 per cent. All are available at 65 per cent LTV. 

Joe Avarne, senior manager, buy-to-let mortgages at The Mortgage Works, said: “We are continually looking to support our existing landlords and these latest reductions will be some of the most competitive and cost-effective options in the market.” 

 

Newcastle BS reduces BTL rates 

Newcastle Building Society has cut its buy-to-let rates by up to 0.3 per cent and lowered the stress rates. 

There is a two-year fix at 80 per cent LTV with a rate of 5.1 per cent with a £999 fee and a five-year fix at the same tier with a rate of 4.75 per cent. This also has a £999 fee. 

Both products are available for purchase and remortgage, have no minimum income or maximum age criteria, and allow overpayments of up to 10 per cent per year. 

The stress rate for its buy-to-let lending for fixed rate products under five years from 8.25 per cent to 7.75 per cent, and longer term products from 5.7 per cent to 5.25 per cent. 

Franco Di Pietro, head of intermediary mortgages at Newcastle Building Society said: “In support of brokers and their landlord clients we’re delighted to announce a comprehensive reduction to our buy-to-let range.  

“These reduced rates are complemented by the enhancements offered by our flexible lending criteria, direct access to our team of underwriters and support for each broker via their dedicated regional business development manager.” 

 

Quantum Mortgages trims BTL pricing 

Quantum Mortgages has reduced rates across fixed term standard and buy-to-let deals by up to 0.8 per cent. 

This applies to two, five and seven-year fixes. 

Across its green mortgages, rates have been lowered by up to 0.95 per cent. 

Harsha Dahyea, head of sales at Quantum Mortgages, said: “We are thrilled to introduce these rate reductions, providing our landlord clients with a competitive edge in the property investment market. 

“Our commitment to sustainability is further emphasised with the substantial rate cuts on our green range for landlords dedicated to eco-friendly property investments.” 

TMW cuts new business and switcher rates

TMW cuts new business and switcher rates

Rates now start from 4.34 per cent for the two-year fixed purchase and remortgage product at 65 per cent loan to value (LTV) with a three per cent fee. This has been reduced by 0.15 per cent. 

At 55 per cent LTV, the five-year fix for purchase and remortgage has been cut by 0.2 per cent to 4.49 per cent. This also has a three per cent fee. 

Its two-year fixed switcher product has been reduced by 0.3 per cent to 5.49 per cent. This is available up to 65 per cent LTV and has a £1,495 fee. 

Daniel Clinton, head of specialist lending at The Mortgage Works, said: “We are extremely pleased to announce further rate cuts to demonstrate our ongoing commitment to landlords. These build on recent enhancements to our proposition, including increasing our maximum LTV to 75 per cent across a landlord’s portfolio. 

“At time where interest rates are pivotal to the short-term profitability of buy to let, we’re proud to offer a suite of fixed rate options below 4.5 per cent, with rates starting as low as 4.34 per cent.”  

TMW cuts BTL rates down to 4.49 per cent

TMW cuts BTL rates down to 4.49 per cent

Pricing will be lowered from Saturday 28 October and start from 4.49 per cent.

This includes a two-year fixed rate product for purchase and remortgage at 65 per cent loan to value (LTV) with a rate of 4.49 per cent. This has been lowered by 0.25 per cent and has a three per cent fee.

Also at 65 per cent LTV, there is a three-year fixed rate switcher product which has been cut by 0.4 per cent to 4.84 per cent. This has a three per cent fee.

A five-year fixed rate at 55 per cent LTV has been reduced by 0.15 per cent to 4.99 per cent. This is available for purchase and remortgage and has a £1,495 fee.

Daniel Clinton, head of specialist lending at TMW, said: “We remain as committed as ever to supporting brokers and landlords in the current market, which is why we’re pleased to announce more rate cuts across our range.

“Our products are some of the most competitive in the sector and, with rates now starting from 4.49 per cent, these new deals will provide better cashflow opportunities for landlords. Moreover, with affordability linked to pay rates, these reduced rates will serve to improve affordability and help widen market access for buy-to-let investors.”

The Mortgage Works reduces rates by up to 0.75 per cent

The Mortgage Works reduces rates by up to 0.75 per cent

This will apply to its new business products from 10 October. 

Within its buy-to-let offering, a five-year fix at 55 per cent loan to value (LTV) has received a rate cut of 0.15 per cent to 4.84 per cent.  

Also reduced by the same amount is a five-year fix at 65 per cent LTV, which now has a rate of 4.89 per cent, as well as a five-year fix at 75 per cent LTV, which is now priced at 5.14 per cent. 

All products have a three per cent fee. 

Dan Clinton, head of specialist lending at TMW, said: “These rate reductions will improve our competitive position and showcase our continued commitment and support for landlords.  

“We know these reductions will be welcomed by buy-to-let investors as we work to support them with their cashflow and affordability.”  

TMW lowers switcher rates for limited company landlords

TMW lowers switcher rates for limited company landlords

From tomorrow, rates for existing landlords switching to a new deal will be reduced by up to 0.35 percentage points.

The rate reductions include;

Dan Clinton, head of specialist lending at TMW, said: “We are continually looking to support existing landlords with competitive products. The swap rate environment has been gradually improving enabling us to reduce rates further. These reductions will be welcomed by buy-to-let investors as we work to support them with their cashflow and help unlock affordability constraints.”

The Mortgage Works cuts switcher rates

The Mortgage Works cuts switcher rates

The changes apply from 19 September and includes a two-year fix at 65 per cent loan to value (LTV) with a £1,495 fee which has gone down by 0.1 per cent to 6.09 per cent. 

A corresponding three-year fix has been reduced by the same amount to 5.89 per cent. 

A five-year fix, also at the same tier, has been cut by 0.15 per cent and now has a fee of 5.49 per cent. 

Last week, the lender made a series of rate cuts which expanded its offering of mortgages with a sub-five per cent rate. 

Dan Clinton, director of landlord at The Mortgage Works, said: “We are continually looking to support our existing landlords with competitive rates.  

“These reductions will be well received by our existing landlords and provide welcome relief over their repayments as they look to manage their cashflow.” 

TMW extends sub-five per cent BTL range in rate cutting drive

TMW extends sub-five per cent BTL range in rate cutting drive

The headline rate applies to the lender’s five-year fixed product at 55 per cent loan to value (LTV) for purchase and remortgage with a three per cent fee. This was lowered from a rate of 5.14 per cent. 

Other deals which now have rates below five per cent include a one-year fix at 75 per cent LTV with a two per cent fee which has been cut from 4.99 per cent to 4.89 per cent, and a two-year fix at 65 per cent LTV which has received the same reduction and is also 4.89 per cent. 

There is also a two-year fix at 75 per cent LTV with a three per cent fee, which was reduced from 5.09 per cent to 4.94 per cent. 

At 65 per cent LTV, the corresponding product has also been cut by 0.15 per cent to 5.04 per cent, as has the option at 75 per cent LTV which is now priced at 5.04 per cent. The latter has a £1,495 fee. 

TMW is also reducing rates across its let to buy and large portfolio range by up to 0.4 per cent, and its houses in multiple occupation (HMO) rates by up to 0.5 per cent for new borrowers. 

Daniel Clinton, head of specialist lending at The Mortgage Works, said: “We are pleased to announce further rate reductions following a sustained period of stability in the swap rate environment. These reductions will be well received by buy to let investors and provide welcome relief over their repayments.” 

The Mortgage Works cuts select limited company rates and adds five-year fixes

The Mortgage Works cuts select limited company rates and adds five-year fixes

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.  

“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.