TMW announce 10-year BTL loan

The new product is available to landlords at 4.99 per cent up to 75 per cent LTV, with a £995 product fee.

The 10-year fixed early repayment charge of 7 per cent until April 30 2019 falls by one percentage point each year thereafter, until the fee reaches one per cent in April 30 2025.

In addition, TMW, a subsidiary of the Nationwide Group, has unveiled new five-year fixed-rate products up to 75 and 80 per cent LTV at 4.19 and 4.49 per cent respectively.

What is more, TMW has reduced five-year fixed-rate mortgages up to 75 per cent LTV by 0.1 of a percentage point to 4.39 per cent.

Rates for the two-year loans fixed at 80 per cent LTV have also been cut by 0.15 of a percentage point to 3.99 per cent.

All five-year and 10-year fixed-rate deals will continue to be stressed at 4.99 per cent with a rental cover requirement of 125 per cent.

A rate of 5.99 per cent will remain in place where overall lending with the Nationwide Group exceeds £1m.

The lender has also withdrawn its two-year fixed-rate product up to 80 per cent LTV with a £995 fee, and replaced existing HMO products replaced with new fee options.

Provider view

Henry Jordan, managing director of TMW, said: “TMW’s 10-year fixed-rate product is currently the only option in the market for those landlords looking to secure their payments for the long term. It will fill a gap in the market that has seen a trend towards longer-term options. With longer-term fixed-rate buy-to-let mortgages available at historically low rates, now could be the perfect time for both experienced and first-time landlords to lock in payments against future rate rises.

“With our lowest stress rate of 4.99 per cent applicable on all fixed-rate terms of five years or more, regardless of LTV, our new five-year fixed-rate deals at 80 per cent LTV will be particularly attractive to landlords with smaller deposits.”

Adviser view

Mike Richards, director of London-based Mortgage Concepts Associates Ltd, said: “In the past, the maximum time lenders would offer on a fixed-term mortgage was five years. With interest rates expected to increase at some point in the year, this new 10-year offering is very useful and comes at the perfect time. The rate for the new five-year product is not bad, too.”

Charges

New products

£995 fee for 10-year fixed rates up to 75 per cent LTV at 4.99 per cent and £1,995 fee for five-year fixed rate up to 75 per cent LTV at 4.19 per cent.

Reduced products

£995 fee for five-year fixed-rate loan up to 75 per cent LTV at 4.39 per cent; 2.5 per cent fee for two-year fixed rate loan up to 80 per cent LTV at 3.99 per cent

10-year fixed early repayment charges: From 7 per cent until 30 April 2019 to 1 per cent until 30 April 2025

Verdict

With base rates expected to rise in the latter part of the year, customers are likely to direct their focus away from short-term fixed-rate deals to longer-term fixed rate offerings. The launch of the 10-year loan and the withdrawal of its two-year fixed rate product up to 80 per cent LTV mirror this shift in focus, and could well encourage increased custom for the lender.