Recently Nationwide building society and their buy-to-let arm The Mortgage Works (TMW) have been putting their rates up so much that they are no longer competitive in the mortgage market meaning that these rate rises are pushing these lenders down the list when mortgage advisors are recommending the best mortgages.
Only last week, Nationwide and especially TMW for buy-to-let purchase and remortgages were very competitive for almost every client and their own unique situations. They were always within the top 5 lenders in terms of their rates and the benefits of their products however now they are not and don’t even rank on the first three pages!
The more the rates go up and the lower the lenders sink in the list of course impacts a lot of our new and existing clients who are delayed, either through their own actions or things outside of their control and we are working hard to make sure that they still get the best deal possible.
What Mortgage Rate Rises Have Come Into Effect
- TMW Rates went from 2.84% for a 5-year fixed rate, to 3.44%. (For a BTL remortgage at 62% LTV)
One of our clients was initially quoted this product because of its ranking in cost efficiency however, now that the rates have risen, this product puts TMW all the way down to the 6th ranking page.
- Nationwide Rates went from 2.94% for a 5-year fixed rate, to 3.24% (For a less than 60% LTV residential remortgage)
One of our clients was quoted this initial rate and product at the start of last week but since then, the product has increased to 3.24% completely relegating it down the list and we are now changing his mortgage application to another lender completely.
Why Are The Rate Rises Happening?
As we’ve already discussed in an article last week, this could be a direct reaction to the Bank Of England base rate rise to 1.25% as many lenders have put up their rates, however, most of these lenders have only slightly increased their rates whereas Nationwide and TMW have pretty much alienated themselves with their rate rises.
Another more understandable reason could be that these rises are the lender’s independent choice to increase rates in line with their own strategy. For example, to meet a plan for a strategy in the future or something to do with meeting their lending targets. Or it could be to reduce demand and business levels. Nationwide and TMW have notoriously very long assessment times due to their popularity when they had competitive rates. Therefore, by increasing their rates to ridiculously high rates, there will more than likely be less applications coming in. A strategy like this may have been employed to give the lenders and underwriting teams time to catch up on their workload. Lenders have been known to use the strategy in the past.
If you or someone you know is looking for a mortgage and are concerned about rising interest rates, please give our friendly and knowledgeable advisor team a call to see how we can help.