Yahoo Finance The Mortgage Works offers sub-4% buy-to-let mortgage
Nationwide-owned lender the Mortgage Works has become the first buy-to-let lender in the current cycle to offer a sub-4% mortgage.
The land-lord focussed lender is bringing in lower rates from 26 March, including a 3.99% five-year fix with a 55% LTV and 3% fee. Mortgages with lower deposits or fees still remain well above the 4% mark.
The cuts come days after the Bank of England signalled that it may start reducing its own interest rates soon. The Bank’s Monetary Policy Committee opted to keep interest rates at 5.25% last week, but no member voted for a hike for the first time since 2021, while some comments from the Bank suggested it was ready to think about cuts.
City traders picked up in particular on a note that interest rates could still be considered “restrictive”, and therefore help to bring down inflation, even after a cut. That led to bets that cuts were coming soon in the interest rate swaps market, which filters through to mortgage prices.
Darryl Dhoffer, adviser at The Mortgage Expert, told news agency Newspage: “Buy-to-let mortgages have been dropping for some time now. Who would have thought that a headline buy-to-let rate of 3.99% would be cheaper then a standard residential mortgage rate? Fair play to The Mortgage Works. Let's hope big brother, Nationwide, wake up and start reducing residential interest rates.”
Charles Breen, founder at Montgomery Financial, said: “This is a master stroke from The Mortgage Works, relieving the pressure on landlords and tenants alike. Hopefully other major buy-to-let lenders will follow in reducing their own rates. As one of the biggest lenders in the buy-to-let space, this is an encouraging sign for borrowers.”
Some lenders, such as HSBC and Generation H, offered sub-4% mortgages earlier this year amid a dramatic “price war” that saw lenders rapidly cut rates.
