The Mortgage Works has slashed mortgage rates for buy to let buyers, launching the first ever five-year fixed rate deal below 2 per cent.
The Mortgage Works, Nationwide’s buy to let arm, has priced the deal at 1.99 per cent for five years. The offering requires a 50 per cent deposit or equity in the property. The deal does however, come accompanied by a £1,995 fee. Rates for the zero fee version of the new mortgage come in at 2.39 per cent.
The Mortgage Works is one of the UK’s largest buy to let mortgage providers. It has also cut rates across its buy to let range by 0.15 per cent. Furthermore, it has launched a fee-free two-year fixed rate at 2.14 per cent.
The lender also decided to adapt rates for existing customers looking to switch products. Fixed rates now begin at 1.99 per cent.
The changes have been released just a week after the lender reported disappointing profits, largely attributed to a slump in lending to landlords. There has also been significant growth in the number of landlords needing to remortgage as their two year deals end in just six weeks.
Following the announcement of the new stamp duty surcharge which came into practice in April 2016, there was a surge in the number of landlords looking to take buy to let mortgages in the first quarter of 2016. Those who took on a two-year deal are now facing the fact that they need to remortgage.
Andrew Montlake, of mortgage broker Coreco, commented: ‘Given that many borrowers hurried through purchases to beat the stamp duty changes two years ago, there is a spike in remortgages expected in the coming months that lenders are looking to take advantage of. As changes to criteria and underwriting are now tied up by regulation, pricing is the only real key differentiator for most lenders, so we expect to see price wars continue in this area of the market for some time yet.’