Buy-to-let mortgage costs down by as much as 8%

Buy-to-let mortgage costs down by as much as 8%

Landlords will continue to benefit further from continuing reductions of mortgage rates as new data shows that buy-to-let mortgage rates have continued to fall by as much as 8 per cent over the past six months.

Mortgage Brain’s latest product data analysis shows the cost of a five-year fixed buy-to-let loan with a 70 per cent loan-to-value (LTV) is now 8 per cent less than it was in March 2016.

The current rate of 2.8 per cent (as of 1 September 2016) means there is a potential annualised saving of £738 on a £150,000 mortgage.

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Buy-to-let mortgages with a 60 per cent LTV have also come down in cost over the past six months.

Examples of this are a five-year fixed rate is down by 5 per cent, a three-year fixed rate is down 4 per cent, and a two-year fixed rate is down 2 per cent in cost since March 2016.

The cost of the lowest rate three-year fixed buy-to-let mortgage at 2.64 per cent, and a two-year fixed rate at 2.89 per cent - both with a 70 per cent LTV – has seen a 6 per cent reduction in cost since March and offer landlords an annualised saving of £504 and £540 respectively.

Mark Lofthouse, chief executive of Mortgage Brain, said: “With further interest rate cuts predicted by the Bank of England it will be interesting to see what happens to mortgage rates and costs over the next few months.

“There is no doubt though that on the whole borrowers and potential buy-to-let investors are in a great position to take advantage of the low rates and cost reductions that we are seeing.”

Ryan Tuff, mortgage advisor at Tussle, said: “Products continue to be refreshed across the majority of lenders, with a wide range of products being improved over the last few days; from BM Solutions, Halifax and Accord.

“Lenders clearly aren’t shying away from what some might see as an unpredictable market. They are offering more attractive five and 10-year rates, so they clearly don’t feel as though rates are going to drastically change in the near-future.

“This is all good news for homeowners - especially those who have seen the value of their home increase since purchase - and presents a good time to take advantage of these loan-to-value driven rates.”