Nationwide launches UK’s first sub-1% BTL mortgage

Nationwide launches UK’s first sub-1% BTL mortgage

Nationwide has launched the UK’s first ever sub-1 per cent buy-to-let mortgage, meaning landlords as well as retail borrowers can now benefit from some of the lowest interest rates ever recorded.

The two-year fixed rate for a 65 per cent loan-to-value mortgage with Nationwide is now 0.99 per cent, but it does incur a 2 per cent fee of the loan amount.

The building society has also made rate cuts up up to 0.45 per cent across its five-year-fixed BTL mortgages.

“The rate war is in full swing and landlords looking to remortgage or invest in a new property would be wise to take into consideration the overall true cost of the deal before they commit as many of the lowest rate deals carry a product fee,” Rachel Springall, a Moneyfacts expert, told FTAdviser.

“Seeking advice to ensure the right deal is chosen is vital, particularly as the BTL market remains fluid.”

Graham Taylor, managing director and financial adviser at Hudson Rose, said with sub-1 per cent deals floating round, it made sense for a landlord to buy with someone else’s money.

“But they’re still paying a 3 per cent stamp duty levy for their BTL property,” Taylor continued. “Regardless of interest rates, investment advisers are saying there are other things to look at before this [investing in property].

“The rate changes are positive in the main, but there are still quite a few other hurdles in the BTL sector which mean other investments seem more attractive.”

Taylor added that “funding can be as cheap as you want”, but the ongoing supply and demand crisis means these rates can only be taken advantage of to a certain extent - with many BTL investors simply unable to find the stock to invest in.

According to Office of National Statistic figures published yesterday (September 30), there was a 10 per cent dip in houses finished in the second quarter of 2021, alongside a 5 per cent dip in the number of houses started by developers, suggesting the crisis shows no signs of easing up.

Nationwide was also the first-ever lender to offer a sub-1 per cent rate on a five-year fixed rate mortgage. 

Its move to offer sub-1 per cent rates on the BTL side undercuts the intermediary arm of Co-operative Bank, Platform, which launched a 1 per cent BTL mortgage deal this week.