Complex Buy To Let
Landlords enjoy falling buy-to-let mortgage costs
Landlords looking for mortgages in November benefitted from lower lending costs as rates continued to fall into the autumn months, research shows.
Mortgage Brain’s product analysis revealed a 4% drop in the cost of a two-year fixed rate buy-to-let mortgage with an 80% loan-to-value (LTV) since August.
With an average rate of 3.34% as of 1 November, the reduction in cost equates to an annualised saving of £324 on a £150,000 mortgage.
The longer-term analysis for this product paints an even better picture with Mortgage Brain’s data showing a 5% drop in cost compared to May 2016 and an 11% fall compared to this time 12 months ago. In financial terms, the 11% reduction in cost equates to a annual saving of £1,098.
At 2.40%, a two-year tracker buy-to-let mortgage with a 70% LTV now costs 3% less than it did three months ago and offers landlords an annualised saving of £234.
Those favouring longer-term deals can also take advantage of the recent price reductions with the cost of a five-year fixed buy-to-let mortgage at 60% LTV now 2% less than it was at the start of August 2016 and 3% less when compared to six months ago.
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While seeing very little movement over the past three months the lowest rate five-year fix with a 70% LTV for buy-to-let customers now costs 6% less than May 2016 and 9% less compared to 12 months ago. With a rate of 2.56%, the 9% cost reduction equates to an annualised saving of £846 on a £150,000 mortgage.
Not all rates have dropped, however. Mortgage Brain’s data highlighted cost increases for some buy-to-let mortgages. A three-year fixed buy-to-let product at 70% LTV now costs 3% more than it did in April and an 80% LTV two-year tracker now costs 4% more than it did three months ago.
Mark Lofthouse, CEO of Mortgage Brain (pictured), said: “The rise in costs for the three-year fixed and two-year tracker mortgages could be a sign that buy-to-let lenders are starting to look at minimising risk amidst further Brexit uncertainty.
“There’s no doubt though that on the whole potential buy-to-let investors remain in a great position to take advantage of the low rates and cost reductions that we’re continuing to see.”