The Mortgage Works Introduces Sub-5% BTL Mortgage Products

by | Thursday 14th Sep 2023 | Mortgage News

In a move that has sent ripples of excitement through the mortgage market, The Mortgage Works (TMW), the buy-to-let arm of Nationwide Building Society, has thrown a bit of a lifeline to property investors by unveiling sub 5% buy-to-let mortgage products. Notably, TMW has not only ventured into this uncharted territory but has also lowered rates across selected new business products, signalling a potential step towards more growth in the buy-to-let sector. As one of the first major lenders to introduce sub 5% buy-to-let loans, TMW has paved the way for landlords and property investors to secure financing at competitive rates. This announcement comes as a breath of fresh air for those in the industry, who have long been grappling with higher borrowing costs and diminishing buy-to-let profits.

The Mortgage Works Game-Changing Rates

Among their buy-to-let offerings, TMW’s five-year fixed-rate purchase and remortgage loans at 4.99% with a 3% fee have taken the spotlight. These loans are available up to 55% loan to value (LTV) and have seen a significant reduction of 0.15%, making them an enticing prospect for investors. Additionally, TMW has extended this rate reduction to five-year fixed-rate purchase and remortgage deals at 5.04% with a 3% fee, available up to 65% LTV. Those looking for even higher LTVs will also benefit, with five-year fixed-rate purchase and remortgage offers at 5.59%, coupled with a £1495 fee, available up to 75% LTV — reduced by 0.15%.

These rate cuts are a testament to TMW’s commitment to supporting property investors and landlords as they navigate the dynamic landscape of the buy-to-let market. However, their buy-to-let stress tests at mortgage affordability stage are still some of the strictest in the market, and many potential borrowers are still being rejected at early stages. To learn more about buy-to-let stress rates, read our recent article here. 

More Rate Cuts

In addition to the sub 5% buy-to-let mortgages, TMW has also announced rate cuts across its let-to-buy and large portfolio range, reducing rates by up to 0.40%. Furthermore, in its houses of multiple occupation (HMO) offerings, TMW has slashed rates by up to 0.50% for new business customers. These rate reductions are poised to make financing for various property investment scenarios such as student lets or lets to young professionals even more attractive, further bolstering the appeal of TMW’s offerings.

This move by TMW, along with similar initiatives by other lenders like Halifax, has come sooner than some experts had predicted. Property website Rightmove had suggested that sub 5% mortgage rates might return to the market in a few weeks due to easing swap rates and market speculations that the Bank of England’s rate raising campaign might be ending.

Current Market Landscape

Despite this welcome shift in the buy-to-let market, the overall market still maintains relatively higher average rates. According to property website Rightmove, the average two-year fixed buy-to-let mortgage rate stands at 6.53%, while the five-year fixed rate hovers around 6.41%. However, these figures are expected to see adjustments as lenders like TMW lead the way with competitive offerings.

Price comparison website Uswitch also reported that the average buy-to-let rate in the UK now stands at 6.54%, showing a modest decline from the previous week’s 6.59%. Among the big six lenders, the average rate is slightly lower at 6.39%. For those seeking the absolute best rates, LendInvest Mortgages currently leads the pack with a rate of 4.59%, underscoring the significance of the recent rate cuts by TMW and others in the industry.

Speak To a Buy-To-Let Expert

The Mortgage Works’ bold entry into the sub 5% mortgage market is a clear signal of its commitment to supporting property investors and landlords. These competitive rates and rate reductions not only provide immediate benefits but also bode well for the long-term growth of the buy-to-let sector as more rate reductions will undoubtedly be on the way shortly.

As the market adjusts to these changes, property investors should keep a close eye on developments, as competition among lenders may lead to even more attractive offerings. The best way to stay up to date with these things is to be in regular contact with a specialist buy-to-let mortgage broker like ourselves at Oportfolio Mortgages. If you are in the buy-to-let market then please feel free to call us or drop us a message to see how we can help.

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