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Lender announces sizeable rate cuts of up to 0.45%. Is TMW's move a precursor of more big rate cuts to come?

Journalist: Riz Malik

ended 05. August 2024

TMW has announced that it will be reducing selected rates across its New Business and Switcher product range by up to 0.45%. Buy-to-let New Business rates will now start from 3.49%. Given the the big market sell-off across the pond and talks of a potential emergency rate cut by the Federal Reserve, Newspage asked brokers if this could be a precursor to other lenders following with equally sizeable rate cuts this week? Their views are below.

7 responses from the Newspage community

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Riz Malik
Independent Financial Adviser at R3 Wealth
These sizeable cuts from TMW could set the tone among the wider lending community. If the US sell-off continues, and given the current geo-political backdrop, there is the potential for some deep cuts from major lenders this week and into next. However, lenders may wait to see if this is a short-term blip before they commit to repricing products and getting inundated with business during the holiday season.
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Olivia Harland
Senior Mortgage Consultant at Cleerly Limited
TMW tend to be one of two or three large buy to let lenders who price their rates very competitively. The rate of 3.49% actually undercuts the best residential mortgage rate by 0.5% - which is also with their parent company, Nationwide Building Society. Whereas the resdiential Nationwide rate carries a lender arrangement fee of £1,499, the TMW buy to let mortgage carries an eye-watering 3% of the loan - so you can see where the profit margin lies. On a loan of £170,000 this would be a whopping £5,100!
The reason mortgage rates like this do get some traction is because of rental stress tests being quite harsh. Many landlords need a very low rate to be able to borrow enough in the current market. The wholesale cuts across the range will make shorter fixed rate terms more attractive too.
The lender to watch in the coming days will be BM Solutions, which is backed by Nationwide's High Street competitor, Lloyds, who also own the Halifax mortgage brand.
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Jack Tutton
Director at SJ Mortgages
The Mortgage Works is setting the pace this week with these reductions. A 0.45% reduction is a significant move by any lender. With financial markets still moving in the right direction after the base rate announcement on Thursday, it will be interesting to see who enters the race next and how bold the changes are.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Rate cuts like this rarely come in isolation so there is the prospect of more lenders cutting, and more significantly, this week. It could be an unseasonally busy August at this rate and the property market could really start firing.
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Darryl Dhoffer
Founder at The Mortgage Geezer
Wow. The Mortgage Works just dropped a bombshell with this headline rate. What a start to the week. If the Fed goes into full-blown panic mode, it's a safe bet that other central banks will follow suit. However, I wouldn't be surprised if lenders start getting cold feet and become more cautious around high LTV mortgages. Either way, this whole situation is a rollercoaster. Let's see what the next few days bring from other lenders.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
With all the government attacks on landlords bringing more doom and gloom, these substantial rate cuts from TMW will be a shining beacon of hope that maybe not all is lost in the property investment space. With the financial markets in free-fall at the moment, perhaps property is again showing itself as a safer long term bet.
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Rohit Kohli
Director at The Mortgage Stop
Haven't seen a reduction in rates like this for some time and with with this level of reduction The Mortgage Works has just shaken the buy to let market of the scale. Hopefully we see more lenders follow suit but we must keep a close watch on global markets as today's movements may signal further reductions if the Fed begin to regret not cutting sooner and take a slice out of US interest rates.