Rate cut on Woolwich buy-to-let up to half a percent on 100 Mortgages

Rate cut by Woolwich buy-to-let by half a percent

Good news for all professional landlords, Woolwich, the mortgage arm of Barclays, is cutting rates on buy-to-let deals by up to half a percentage point.

There will be a new rate from Tuesday of 6.99 percent on its five-year fixed-rate deal, down from 7.49 per cent. The interest rate on its portfolio lifetime tracker, aimed at professional landlords, will also fall, from 1.99 percent above the base rate, currently 5 per cent, to 1.49 per cent rate above the base rate.

Last Friday Halifax owned by HBOS cut rates by up to almost a third of a point on some mortgage deals, plus the Bank of Scotland who is also part of the HBOS group reduced rates by 0.45 percentage points. It seems that the Buy-to-let landlords are benefiting from a series of rate cuts.

It’s not just the Buy-to-let landlords that have benefited from the latest rate cuts; Woolwich also cut rates on residential deals by up to 0.35 percentage points while Abbey, Britain’s second-biggest lender reduced its fixed-rate deals by 0.1 percentage points. Nationwide and Lloyds TSB have also announced cheaper deals.

The reason for the lenders reducing their rates on home loans is because there was an ease in some of the conditions in the inter-bank lending market. Swap rates, which determine the cost of fixed-rate mortgages, fell below six per cent last week after peaking at 6.5 per cent in mid June.

It now seems that banks are gently lending more, after they reduced their mortgage books earlier this year.

To benefit from the two new Woolwich rates you maximum loan would be 75 percent of the property value, so you would have to put 25 percent down as deposit. The five-year fixed-rate deal has a 1 per cent fee. It has an early redemption charge (ERC) for the first three-years of six months interest. The lifetime tracker charges a fee of £295 per property and also has an ERC for the first three years, of two months interest.

There are a few good deals out there such as this one from Stroud & Swindon currently offers one of the most competitive fixed rate deals. Its three-year fixed-rate buy-to-let home loan has a rate of 6.80 per cent with a £1499 fee on loans of up to 75 per cent of a property’s value, with no extended ERCs.

Leeds Building Society is also offering a lifetime tracker at 1.59 per cent above the base rate for life of the loan, with a maximum LTV of 70 per cent, with a £1499 fee and no early repayment charges.

Source: timesonline