01/05/2025
, you’ve probably seen the buzz about The Mortgage Works (TMW) launching a shiny new 65% LTV mortgage product with a tempting 2.99% fixed rate for 2 years.
It’s available for both purchase and remortgage, and on a £100,000 interest-only mortgage, you’re looking at monthly payments of just £256.64. Sounds like a steal, right? But hold on—there’s a 3% arrangement fee (£3,000 on that £100,000 loan), and it might not be the best deal, even within TMW’s own range.
Compare that to TMW’s 4.49% 2-year fixed mortgage with no arrangement fees. The monthly payment is higher at £374.17, but you’re saving £3,000 upfront. Yes, the lower rate saves you £117.53 a month, but it would take nearly 26 months to recoup that £3,000 fee—longer than the 24-month term of the mortgage!
Here’s the key takeaway: headline-grabbing low rates aren’t always the best choice. As landlords, you know every penny counts, whether you’re expanding your portfolio or remortgaging an existing property. That’s where working with a mortgage adviser comes in. We can calculate the **true cost of a deal over the initial period**, factoring in fees, rates, and your unique situation.
You may read from this, "Broker said the higher rate TMW product is better" but don't! In certain circumstances, the 2.99% rate could be better, especially for lower loan amounts.
Sometimes, paying a fee for a lower rate makes sense—like when it improves your rental affordability calculations, helping you meet lender criteria or boost cash flow. Other times, a no-fee deal saves you more upfront and keeps things simple. It all depends on your goals, property value, and loan size.
Don’t get dazzled by a low rate alone. Reach out to a mortgage adviser to crunch the numbers and find the deal that truly works for you. Got questions or want to explore your options? The Cyborg Finance Team would love to help.
Source:
New TMW 2.99% landlord mortgage sounds great, but a 3% fee means it’s not always the best deal!
