Buy to let mortgage rates are falling

The majority of fixed rate buy to let mortgage rates are continuing to fall, according to the latest tracker report from the industry.

The biggest fall in monthly cost was for five year fixed rate buy to let mortgage offers for 50% of the value of a property, the data from Property Master’s August report shows.

The report, which tracks the cost of mortgages from 18 of the largest buy to let lenders, found that the monthly cost of this type of mortgage fell by £13 per month July to August and five year fixed rates for 65% of the value of a property fell month on month by £5.

However, five year fixed rates buy to let mortgage at 75% of the value of a property was one of only two types tracked to show an increase, up £29 per month. The report says that this may reflect the attractiveness of five year fixed rate products to landlords struggling to meet new affordability regulations.

The cost of two year fixed rate buy to let mortgages for 65% of the value of a property fell by £2 per month and for 75% of the value of a property by just £1. Two year fixed rate buy to let mortgages for 50% of the value of a property increased by £4 per month.

‘There have been a slew of rate cuts amongst lenders along with new offers being launched that are looking very attractive to landlords wanting to expand their portfolios or needing to remortgage. Good news on rates may well entice some landlords back into the market by helping them offset the many recent regulatory and tax costs they have been struggling to absorb,’ said Angus Stewart, Property Master’s chief executive.

‘In terms of predicting the outlook on interest rates it clearly has never been more difficult. Brexit uncertainty is continuing, and it would appear the financial markets are taking the latest comments from the Bank of England to signal a cut in rates in the light of a disorderly exit from the European Union,’ he pointed out.

‘If Brexit goes smoothly and some kind of deal is reached then we are more likely to see rates rise in line with the plans to normalise interest rates that the Governor of the Bank of England outlined some time ago,’ he added.

He advises that landlords needing to remortgage despite this rather complicated outlook for interest rates still need to plan at least six months in advance as a remortgage is in affect requesting a new loan and if you move to a new lender for a better deal you will need to have got together all the paperwork you need.