BUY-to-let rates have been cut by up to 0.15% by The Mortgage Works to as low as 2.72% with one expert saying it showed “the popularity of buy-to-let is still strong” while another cautioned that “landlords need to look beyond the headline” to the hefty fees attached to such a low rate.
The Mortgage Works is tomorrow (Saturday 17 January) cutting rates by up to 0.15 percentage points on selected two, three and five-year fixed rate products across its mortgage range for new and existing customers.
These include an eye-catching two-year fixed 2.72% deal that’s been reduced by 0.12% – but it does come with a hefty 3% fee and is only available up to 65% Loan To Value (LTV).
This comes after Nationwide announced it was cutting mortgage rates earlier this week by up to 0.2%, taking them to the “symbolic” milestone of 3.5%.
Keir Fraser, Lead Manager at The Mortgage Works, said: “We are always looking for ways to offer landlords our best range of products, so we’re delighted to be able to start the year with rate cuts for new and existing customers across our mortgage range.”
Landlords under strain
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said it showed the popularity of buy-to-let is still strong.
He added: “Good to see the important buy-to-let market benefit from the recent cuts in mortgage rates, albeit the headline deal is specifically for existing clients looking for a new deal.
“As always, the inherent price of any deal is a combination of rate and fee, but it shows that The Mortgage Works are keen for business and that the popularity of buy-to-let is still strong, especially for experienced landlords looking for higher returns on renewals.”
Keen for business
Harps Garcha, Director at London-based Brooklyns Financial, warned borrowers that the eye-catching 2.72% figure comes attached with high fees.
She continued: “A 2.72% headline rate from The Mortgage Works looks attractive, but landlords need to look beyond the headline. With lending fees of around 3%, the overall cost can easily outweigh the benefit of the low rate.
“That said, for landlords struggling with affordability, a lower rate may be the key to refinancing. In buy-to-let, however, rate and fees must always be reviewed together as a package, not in isolation.”
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said the new deals are desperately needed by landlords.
He added: “The Mortgage Works has made cuts across their products as they look to improve their offerings to new borrowers and existing borrowers.
“The Mortgage Works are known for being a lender that offers some of the better rates in the buy-to-let market and this move is required to help landlords who are already under the strain of higher costs.”
