Mortgages for Business said this is great news for landlords who favour shorter-term products, but those wishing to lock into record low rates for the longer term must act quickly.
However, five-year fixed rates crept up for the second month in a row to 3.77%, exceeding the average price of three-year fixed rates for the first time since January 2015, according to its buy to let product index.
CEO of Mortgages for Business, David Whittaker explained that longer-term swaps have risen in recent months, so it’s no surprise that pricing for five-year fixed rates have started to creep up.
“However, when looking at the bigger picture, these rates are still, on average, less than 1% more than their shorter-term counterparts. As such, we continue to recommend them to customers as they not only provide a longer period of security against rate rises in an uncertain market, they can also save landlords the time and money it costs in remortgaging more often.”
He added that landlords might consider having a few properties on five-year fixes to ‘spread risk.’
The index also found that January was a good month for short-term tracker products, with two-year buy-to-let tracker rates again at an average of just 2.81%.