Cost of buy-to let fixed rate mortgages declines
Research by online mortgage broker Property Master has revealed that the cost of all the fixed rate buy-to-let mortgage categories it tracks are down year-on-year.
Some rates have fallen by nearly £50 per month, which represents a saving of almost £3,000 over the course of a 5-year fixed rate mortgage.
Angus Stewart, chief executive at Property Master, said: “Another fall in the cost of borrowing is very good news for landlords.
“We know that there are landlords languishing on expensive SVR mortgages as the uncertainty around Brexit and political instability has put them off moving on to a more competitive fixed rate.
“With the current record low rates on offer these landlords should act quickly because if the “Boris bounce” becomes a reality it may allow interest rates to begin to rise back to more normal levels.”
“We are expecting a particularly busy next few months.
“This April it will be four years since significant changes were made to Stamp Duty.
“The decision by the then government to slap on a 3% surcharge on buy-to-let properties led to a mini-boom as landlords rushed to buy properties to beat the deadline.
“We suspect many of those landlords will be coming to the end of fixed rate mortgages around now and should be pleasantly surprised at what the market is prepared to offer them in terms of a good deal.”
Property Master’s February 2020 Mortgage Tracker shows the biggest year-on-year fall in cost was for 5-year fixed rate buy-to-let mortgage offers for 65% of the value of a property.
The monthly cost of a typical £150,000 mortgage for 65% of the value of the property fixed for five years fell by £48 per month between February 2019 and February 2020.
Year-on-year falls for 2-year fixed rate buy-to-let mortgage offers were more modest.
The cost of a typical 2-year fixed rate mortgage for £150,000 for 75% of the value of the property was down £25 per month year-on-year and for 65% of the value of a property by £19 per month.
However, both categories are at the lowest level they have been since Property Master began tracking rates in April 2018.