Fixed rate buy to let mortgage rates fall unexpectedly
There has been an across the board fall in fixed rate buy to let mortgage deals which comes amidst signs that the mortgage market was beginning to expect an interest rate rise.
Recent remarks by the Governor of the Bank of England that the UK leaving the European Union without reaching some sort of trade agreement may well require some sort of economic stimulus such as a cut in rates, buy the fall in costs is still ‘unprecedented’, according to online mortgage broker Property Master.
The firm’s July 2019 mortgage tracker report shows that the biggest fall in monthly cost was for five year fixed rate buy to let mortgage offers for 75% of the value of a property, down by £36 per month from June to July.
Five year fixed rates for 65% of the value of a property fell month on month by £6 while five year fixed rate buy to let mortgage offers for 75% of the value of a property fell by £3 per month.
Two year fixed rate buy to let mortgages for 50% and 65% of the value of a property fell by £5 each and two year fixed rate buy to let mortgages for 75% of the value of a property fell by £8 per month.
The Property Master 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 for this month’s Mortgage Tracker were calculated on deals available on July 01, 2019.
‘We have been tracking buy to let mortgage interest rates in this way for 18 months and we have never seen before a fall across the board in this way. It is quite unprecedented,’ said Angus Stewart, Property Master’s chief executive.
‘Last month we were seeing a drift upwards in the cost of buy to let fixed rate mortgages but it may be that the market is now expecting rates generally to fall rather than rise. It is likely that lower rates are also being fuelled by the continuing increase in the number of buy to let mortgage products,’ he explained.
‘Whilst it is true some lenders have exited the market others are boosting their range and competing hard for new business. As landlords continue to be pressed on all sides by rising regulatory cost such as the new tenant fees act and falling tax reliefs today’s news of a lowering of mortgage costs will be very much welcomed,’ he added.