According to the firm, the average five-year buy-to-let fixed rate at 75% loan-to-value (LTV) has fallen by 0.49% in the past six months and is the first time this rate has fallen below 4%.
Compared to a year ago, average five-year fixed rates ranging from 60% to 75% LTV have fallen by almost 1%, with rates at 60% LTV dropping by 0.91% to 3.48%.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The reduction in the Bank of England Base Rate to 0.25% has already affected buy-to-let rates, with the average five-year fixed rate at 70% LTV falling by 0.15% in just one month. In fact all LTVs for five-year fixed rates have reached the lowest in the market this month.
“With savings rates at record lows, many savers that once used their interest to supplement their income are looking elsewhere, and as bricks and mortar is often deemed a ‘safe bet’ many are looking at buy to let as an investment option.”
Nelson added that ongoing changes to the private rental sector could see desire for long-term fixes grow further.
“As five-year fixed rates get ever lower, and with more calls for longer-term tenancy agreements, we could perhaps see a shift in the focus of the buy-to-let landlord whereby the investments become a more long-term prospect.
“Low rates may make a buy-to-let investment an attractive option, but borrowers should remember that a buy-to-let investment is not without its risks, so it is important for any potential landlords to seek financial advice to see if buy to let is the right option for them.”
