The Mortgage Works (TMW), part of the Nationwide Group, is to apply a reducing scale of early repayment charges (ERCs) to all new buy-to-let mortgages, where customers redeem their loan before the end of the deal period.
Landlords seeking two, three and five-year fixed rates, two-year tracker and lifetime variable loans will see their ERCs reduced. A customer redeeming before the end of their two-year fixed rate will now pay an ERC of 3% in Year 1 and 2% in Year 2, while those opting for a two-year tracker will now pay an ERC of 2% in Year 1 and 1% in Year 2.
ERCs attached to TMW’s 10-year fixed rate mortgage, which is currently the longest fixed rate product in the buy-to-let sector and the only 10-year fixed rate deal, are unchanged as they are already stepped.
The revised structure, where charges reduce each year, means that customers who need to redeem towards the end of their deal period will now pay less to exit.
Henry Jordan, managing director of TMW, said: “This move by TMW to step early repayment charges will provide landlords with greater flexibility, alongside offering some of the most competitive ERCs on the market.”
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