This text discusses recent rate cuts on buy-to-let mortgages in the UK.This text discusses recent rate cuts on buy-to-let mortgages in the UK. Paragon Bank is reducing rates and introducing new five-year options for landlords, with loan-to-value ratios up to 65% and application fees of £750. Interest coverage ratios are calculated at 5% for products with a 5% fee. Other lenders mentioned in the text include Agreement, LendInvest Mortgages, West One, Foundation Home Loans, and The Mortgage Works. These lenders have also announced rate cuts, including two-year fixed rates, three-year fixed rates, and five-year fixed rates. The article highlights that these rate cuts are part of a trend of lenders competing for business during the summer season. It also mentions that top mortgage lenders have been cutting their rates, with expectations of a rate cut from the Bank of England in August. The text concludes by quoting Mark Harris, CEO of SPF Private Clients, who states that the rate cuts are good news for borrowers facing affordability challenges and that expectations of a rate cut in August are high.
These products are available with a loan-to-value ratio of up to 65% and have an application fee of £750. On completion you will receive £750 cashback.
The interest coverage ratios are calculated at 5.00% for the 5% fee products and are in line with the initial rates for the zero fee options.
Louisa Sedgwick, Commercial Director of Mortgages at Paragon Bank, says: “We are reducing rates across our core range and introducing a number of flexible new five-year options to give landlords more choice. In addition to this rate reduction, rates for products that charge a £750 application fee are lower than our core range.”
This ends a week of rate cuts intended to entice investors into investment properties.
Agreement says new buy-to-let borrowers can now benefit from reduced two-year fixed rates, ranging from 0.05% to 0.40%. Three-year fixed rates are also being reduced by between 0.10% and 0.20%, and Accord’s two-year tracker rates are being reduced by 0.05%. All the cuts apply to the lender’s new business BTL range, with the exception of its 80% loan-to-value products.
And LendInvest Mortgages has followed up last month’s rate cuts with further cuts in a number of five-year rates by up to 0.10%, with rates now starting at 4.99%.
In the meantime West oneThe latest rate changes mean the buy-to-let range starts at 3.09% and caters for a range of borrowers including first-time landlords, those with poor credit and portfolio landlords looking to borrow up to £10.5m. The BTL range also offers solutions for HMOs, multi-unit freehold blocks (MUFBs), holiday lets, ex-local authority, let-to-buy and expat borrowers.
Buy to rent by Foundation – the buy to let brand of Foundation Home Loans – has launched a new five-year, fixed rate Limited Edition product. Available within the F1 tier for customers with an ‘almost clean’ credit history, the new product is available up to 75% LTV with a rate of 5.59% and a fee of 2.25%.
Finally The Mortgage Works has today reduced rates by up to 0.30% on selected BTL products for both new and existing customers.
For new businesses, the revised rates include a two-year fixed rate for BTL purchase and refinance of 3.69% with a 3% fee, available up to 65% LTV, reduced by 0.10%. There is also a five-year fixed rate for BTL purchase and refinance of 4.04% with a 3% fee, available up to 65% LTV, also reduced by 0.10%.
Mortgage Works’ five-year fixed switcher rate of 4.14% with a 3% fee, will see a reduction of 0.10% and is available for BTL purchases up to 75% LTV. As part of these changes, the lender’s new business rates for private limited companies have also been reduced. These include a two-year fixed rate for buy-to-let purchases and refinances of 4.99% with a 3% fee, available up to 75% LTV, reduced by 0.30%.
Mark Harris, CEO of mortgage broker SPF Private Clients, said: “With the top five lenders – Barclays, HSBC, Santander, Halifax and NatWest – cutting their mortgage rates this week, lenders continue to fight for business as they ramp up the summer sale. Those lenders who have not yet repriced are likely to follow suit, as long as service levels allow.
“While swap rates, which form the basis for pricing fixed-rate mortgages, have not shown a consistent downward trend, the need to do more business appears to be motivating lenders to adjust their rates.
“It’s good news for borrowers, many of whom are struggling with affordability after successive rate hikes and then holding on. Expectations of a rate cut in August are high.”
