According to data released by specialist buy-to-let broker Mortgages for Business, the cost of two-year fixed rates up to 65% loan-to-value (LTV) saw the biggest fall, coming down 0.69% over the quarter to stand at 5.27% (with fees factored in).
Headline rates of interest, without allowing for fees, fell by an average of 0.27% in the first quarter, suggesting that overall fees also fell slightly.
The difference in the cost of three-year and five-year fixed rate buy-to-let mortgages shrank during the first three months of the year, with many five-year deals now priced at similar levels to their three-year counterparts.
The margin over LIBOR charged on buy-to-let tracker deals fell from 0.7% to 0.4% in the first quarter.
Buy-to-let mortgage deal umbers fell from 444 on 1 January to 434 at the end of the quarter, but many are simply dropping their least popular deals, said the broker firm.
Only 9% of the buy-to-let mortgages available in Q1 2013 came with no arrangement fee, but that was a small improvement on Q4 2012 when 8% were arrangement-fee-free.
Of the remainder, 43% had arrangement fees of between 1% and 3% of the loan amount, while 48% came with a flat fee. The average flat fee is now £1,534, down £24 on Q4 2013.
Mortgages for Business said: “Overall these figures are good news for borrowers and demonstrate that competition between lenders has intensified.”
