Buy to let mortgage rates falling across the board

The cost of fixed rate buy to let mortgages is falling with the biggest month on month decline in two year deals for 50% of the value of a property, the latest industry data has found.

Indeed, the monthly cost of this type of mortgage fell by £24 and two year fixed rates for 65% also fell, down by £8 per month while those for 75% were down by £3, according to the September 2019 mortgage tracker report from online mortgage broker Property Master.

The more popular five-year fixed rate buy to let mortgages fell across all categories tracked. The monthly cost of a five-year fixed rate for 50% of the value of a property fell by £14 per month, those at 65% were down by £11 per month and for 75% they fell by £6 per month.

The mortgage tracker follows a range of buy to let mortgages for an interest only loan of £150,000. Deals from 18 of some of the biggest lenders in the buy to let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise were tracked. Figures were calculated on deals available on 01 September.

‘Once again we have seen the cost of buy-to-let mortgages fall across all the categories we track. At the moment lenders in this marketplace have a glut of money to lend,’ said Angus Stewart, Property Master’s chief executive.

‘The current downward pressure on rates in the money markets means they are able to source funds cheaply at historically low interest rates. Some lenders have also drawn in money from the consumer market by launching headline-grabbing savings rates which whilst still low are relatively attractive,’ he explained.

‘More generally no-one really wants to predict the outcome of Brexit but it may be that certainty, one way or another, is just around the corner. Once the market is more certain about what is happening this volatility and the bargains it has thrown up will probably come to an end,’ he pointed out.

But he warned that landlords may not have long to benefit. ‘Even if a landlord’s fixed rate is not yet due to expire it would be worth looking at what is currently available. In some situations, it might be worth paying to exit an existing fixed rate deal early,’ he added.

‘With some lenders willing to hold a new product deal for up to six months there is an opportunity to apply now and see what happens with rates. It will pay most landlords to at least review their position while rates are low,’ he concluded.