TMW raises rates and withdraws mortgage products – brokers warn of “broader trend” – The Intermediary

The Mortgage Works (TMW) has increased rates on a selection of buy-to-let (BTL) mortgage products, including let-to-buy, large portfolio and limited company lending.

The lender has also withdrawn various products across its range, with all changes effective from tomorrow (3rd January).

This followed sister lender Nationwide raising certain residential mortgage rates.

In the BTL space, increases apply to various 55% loan-to-value (LTV) 5-year deals. 65% LTV 2-year deals, and 75% LTV 2-year and 5-year deals.

65% and 75% deals were withdrawn across 2-year, 5-year and 2-year tracker products.

2-year and 5-year let-to-buy rates were also raised or withdrawn across 2-year and 5-year fixed rate products.

For large portfolio BTL and let-to-buy deals, TMW withdrew or raised rates on 2-year and 5-year 75% LTV products.

For limited company BTL products, the lender withdrew its 1-year 75% LTV rate, and raised rates on various products in the 2-year and 5-year fixed ranges at 70% and 75% LTV.

Newspage asked brokers for their thoughts on the changes, and what this might mean for the market.

Reactions:

Akhil Mair, director at Our Mortgage Broker:

“It seems the January sales frenzy has come to a close as The Mortgage Works announces rate increases across its New Business product range starting February 3rd.

“This move signals a broader trend in the market we are witnessing with more to come in our opinion in the short term.”

Gary Bush, financial adviser at MortgageShop.com:

“Landlords are under attack from tomorrow with the latest mortgage rate increases from lender Mortgage Works – they seem to be following their sister lender Nationwide Building Society, indicating that they are attempting to slow down the level of applications they are processing.

“Thankfully other Buy to Let lenders are going in the other direction, decreasing their rates, which will thankfully take up the slack created by TMW’s announcement this afternoon.”

Justin Moy, managing director at EHF Mortgage:

“TMW has had some of the cheapest Buy to Let deals recently and has been quite aggressive with rater cuts over the last few weeks, so there would be an inevitable change given the uplift in SWAP costs.

“But to their credit, only smaller pockets of their rates are affected, typically the lowest LTV and those products with no product fee are most affected, as are the Ltd Co BTL rates.

“Plenty of decent options still available, but time may be short.”

Scott Taylor-Barr, principal adviser at Barnsdale Financial Management:

“As swap rates have now appeared to have bottomed out and stopped their march downwards, we are seeing lenders’ pricing change, now less driven by the cost of their own funding, but more to manage their workflows.

“Previously lenders held themselves at the top of the market for too long and ended up drowning in applications, resulting in truly woeful service to brokers and borrowers.

“Many do not want to repeat that and are proactively managing their inflows with small increases and decreases in certain key product areas to keep themselves on an even keel.”