MortgagesApr 12 2017

Metro Bank launches range of BTL fixes with huge LTV cuts

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Metro Bank launches range of BTL fixes with huge LTV cuts

Metro Bank has unveiled a duo of five-year fixes and a host of rate reductions on core buy-to-let products up to 75 per cent loan to value (LTV).

The first newly launched five-year fix is available to 65 per cent LTV at 3.59 per cent with a 2 per cent product fee. The second – to 75 per cent LTV - comes with a rate of interest of 3.79 per cent with a 2 per cent product fee.

Highlights of the revisions for borrowers with a 35 per cent deposit includes three and five-year fixes, which are available at a discounted rate of 3.39 per cent and 3.69 per cent with a 1.50 per cent and 2 per cent product fee, respectively.

The two-year and five-year tracker options command the same discounted priced of 2.84 per cent plus the base rate – currently at 0.25 per cent – with a 1.5 per cent product fee.

At 75 per cent LTV, a three-year fix is available at 3.59 per cent, while the five-year equivalent is priced at 3.89 per cent. A 1.5 per cent product fee applies to both deals.

The two and five-year tracker options are mirrored – both discounted by 0.25 of a percentage point to 3.04 per cent plus the base rate.

In addition, for existing customers looking to switch to a new deal, the lender has introduced a range of new fee-free products as well as offering reduced product fees across its core range.

Provider view

Mark Stokes, managing director, commercial banking at Metro Bank, said: “We’re absolutely committed to supporting the growing number of professional landlords, while also rewarding loyalty. Today’s announcement is just the first of a series of initiatives that we hope will help our customers grow and develop their portfolio.”

Adviser view

Commenting on the new five year fixes, Ciaran Scullion, financial adviser at Northern Ireland-based From Acorns Financial Planning, said: “The deals sound very competitive and are, in truth, reflective of the challenges facing the buy-to-let (BTL) market at the moment. I find that clients favour the shorter two and three-year fixed rate options because a lot can change in a short period of time.

“With the rates as low as they are at the moment, I would imagine remortgaging becoming increasingly popular.”

Charges

Ranges from 1.50 per cent to 2 per cent.

Verdict

The BTL market has been battered by the tax and criteria changes in recent history. The plethora of discounted BTL deals suggests that lenders are worried about the impact of these changes on business volumes – with the majority of industry commentators forecasting a slowdown in the market.

Aspiring landlords may be put off from applying for BTL mortgages by the inflated stamp duty levy. However, existing landlords are likely to ditch their current deal for access to cheaper rates.

There are only so many times a lender can slash rates before it has a telling impact on their bottom line. It will be interesting to see the direction that lenders operating in the BTL space will take to plug the black hole in BTL  revenue brought about by the changes. Some may be tempted to dip a toe in some of the burgeoning areas of the mortgage market – such as lending to individuals with impaired credit.