TSB has applied a 0.10 percentage point discount on its entire buy-to-let range while upping rates on selected residential fixes – both for home movers.
Highlights of the buy-to-let range includes a two-year fix at up to 60 per cent loan-to-value at 1.79 per cent with a £1,995 fee. The product is also available at a reduced fee of £995 or fee free with an inflated rate of 2.24 per cent and 2.69 per cent respectively.
The two-year buy-to-let tracker product is also available at a lower rate of 1.69 per cent to 60 per cent LTV with a £1,995 fee. Meanwhile, the lender has increased the rate on a number of its two and five-year residential fixes by 0.05 of a percentage point.
These include a two-year fix at between 85 per cent and 90 per cent LTV which is now available at 2.29 per cent with a £995 fee or 2.69 per cent fee free. What is more, the lender tripled the cashback on selected fixes for home movers from £250 to £750 - matching the existing cashback it offers to some first-time-buyers
A five-year fix, for example, at between 90 per cent and 95 per cent LTV is priced at 4.49 per cent from 4.44 per cent with a £995 fee but with £750 cashback.
Provider view
Roland McCormack, TSB mortgage distribution director, said: “It’s great to know that we will be heading in to the New Year on the side of all borrowers and brokers by offering a great range of products and outstanding service throughout the festive period.
"In January, we will be celebrating our two year anniversary at TSB Intermediary, we have exciting plans ahead and today’s changes will help brokers get off to a great start in 2017 with TSB.”
Adviser view
Mike Richards, director of London based Mortgage Concepts Associates, said: “There has certainly been a decrease in the demand for buy-to-let mortgages. The papers tell us that a lot of landlords have put their properties up for sale because of things like the reduction of buy-to-let tax relief. I think many landlords will simply increase rent on their properties. Other things like the increase in buy-to-let stamp duty, and changes to the rental affordability calculation by the Prudential Regulatory Authority means that it is now more difficult for people to obtain a mortgage. In saying this, buy-to-let is still a viable proposition for many people.”
He added: “I think the rates for residential mortgages will remain fairly static this year, while the rates for buy-to-let deals could decrease by as much as 25 per cent.
“Demand for equity release and lifetime mortgages are likely to increase because there are an increasing number of people approaching retirement age who still have a mortgage.”
Charges
Ranging from fee free to £1,995.
Verdict
It is no secret that the demand for buy-to-let mortgages is on the wane following the introduction of a number of initiatives that are unfavourable to landlords. These include a hike in stamp duty to more stringent rental affordability calculation. It is therefore unsurprising that many lenders discounted their products to entice existing and prospective landlords. Here, the reductions are not dramatic but could be a precursor of greater rate cuts in the future.
On the residential side, the lender does not give a reason for the rate increases on selected two and five-year products and the rationale behind the hike is difficult to decipher. However, some of these products qualify for the newly increased £750 cashback initiative which would offset the rate rise somewhat.
