All about: The Mortgage Works (TMW)

The Mortgage Works is a specialised mortgage lender owned by the Nationwide which offers buy to let mortgages for first-time landlords, remortgage packages and mortgages in relation to property portfolios. The Mortgage Works also makes products available through professional intermediaries, and has developed a range of mortgage products exclusively for those intermediaries.

Buy to let mortgages

Buy to let mortgages are offered at fixed or variable rates of interest. The current buy to let rates may be found on the TMW Direct website. Fixed rate mortgages are available for the first one to five years of the mortgage term, the interest rate then reverting to the Mortgage Works Managed Rate, a variable interest rate. Alternatively, a one or two year base rate tracker mortgage is available, the interest rate reverting to the Mortgage Works Managed Rate at the end of the tracker term. Borrowers should be aware that an arrangement fee may apply to some of these fixed rate mortgages, typically 2.5% to 3.5% of the amount borrowed. Generally, a maximum of 65% of 75% of the value of the property may be borrowed, depending on the terms of the mortgage. An early repayment charge would generally apply during the fixed or tracker rate period. Some mortgage deals may offer benefits such as a free standard valuation, free standard legal fees or cash back. The term of a mortgage from The Mortgage Works may be from 5 years to 35 years. Generally, capital repayments of 10% of the mortgage may be made in a year without incurring any penalty. People applying for mortgages must be residents in the UK. The maximum loan to value per property is 80% for properties up to £350,000; 65% for loans above this amounts up to £1 million; and 50% loan to value for properties above this amounts up to £1,500,000. The amount that may be borrowed is linked to the rental income from the property. The required rental income ratio is generally 125%, meaning that the projected rental income from the property must be 25% higher than the mortgage payment. For property that is in multiple occupation, the projected rental income ratio must be 150%.

Let to buy mortgages

A let to buy mortgage may be taken out by a home owner who is moving to another location and intends to remortgage the existing home as a buy to let property. The home may be let out and a loan arranged on the basis of the amount of projected rental income. The mortgage application will only be accepted where there is a simultaneous purchase of a new residential property. A maximum of 75% of the value of the home may be borrowed.