The Mortgage Works Cuts Stress Rates to Boost Landlord Affordability

The Mortgage Works (TMW), a leading buy-to-let lender, has announced a significant reduction to its affordability stress rate, a move designed to enhance borrowing capacity for landlords across various property types.

Effective immediately, TMW has reduced its stress rate by 0.50% for new buy-to-let applications up to 65% loan-to-value (LTV). This change applies specifically to five-year fixed terms or like-for-like remortgages across all fixed product durations. The revised stress rate will now be the higher of 4.00% or the pay rate.

Key Benefits

This adjustment is particularly beneficial for individual applications, including standard buy-to-let, let-to-buy, large portfolio, and Houses in Multiple Occupation (HMO) cases. For applicants with LTVs exceeding 65%, the stress rate will be the higher of 4.50% or the pay rate. It is important to note that there are no changes to the stress rate applied for Limited Company mortgage applications.

Damian Thompson, Director of Landlord at The Mortgage Works, commented on these positive changes, stating: "These positive changes to our stress rates will serve to boost affordability. They will enable landlords to borrow more with us but, at the same time, will ensure that we continue to lend responsibly."

Eligibility Criteria

Jeni Browne, Business Development Director at Mortgage Finance Brokers, welcomed the move, noting its potential to revitalize the private rental sector. She explained that many landlords have faced difficulties remortgaging or acquiring new properties due to more stringent rental calculations stemming from higher interest rates. This reduction by TMW, as the UK's largest buy-to-let lender, will allow property investors to remortgage and access better mortgage rates, encouraging further investment.

The Mortgage Works' commitment to adapting its criteria demonstrates its ongoing support for landlords in navigating the evolving mortgage market and maintaining a healthy private rental sector.

Application Process

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