Coventry for intermediaries has cut rates by 0.3 percentage points across its range of five-year buy-to-let fixes for borrowers with a 25 per cent deposit.
Interest rates of 2.99 and 3.39 per cent are applicable to fixes at 75 per cent loan-to-value to 31 January 2022 with arrangement fees of £1,999 and £999 respectively.
The fee-free option has also been discounted from 3.99 per cent to 3.69 per cent.
Early repayment charges are applicable.
The lender has also increased its maximum age at the end of the term from 75 to 85 for buy-to-let investors.
Kevin Purvey, director of intermediaries at Coventry, said: “Today’s mortgage market has to adapt to the changing needs of borrowers. With more people working later in life, buy-to-let investors may want to keep their investment property to supplement their income, or to help save for the future. We have therefore reviewed our lending policies to adapt to these changes, while of course remaining committed to lending responsibly.”
Last month, the lender revamped its range of three-year residential fixes for borrowers with deposit levels of up to 10 per cent LTV.
Three-year fixes are now available at 2.19 per cent to 65 per cent LTV; 2.35 per cent to 75 per cent LTV and 2.89 per cent to 90 per cent LTV. The trio of deals come with no arrangement or booking fee.
Provider view
Mr Purvey said: “We’re happy to announce that we’ve reduced mortgage rates across our range of buy-to-let fixed-rate mortgages. With continuing uncertainty in the market, our rate reductions mean that brokers can offer their clients the stability of a fixed monthly repayment at a highly competitive rate. In addition, all of our products are still booking fee free and include a valuation of up to £700 for buy-to-let mortgages.”
Adviser view
Michael O'Brien, director at Essex-based Access Financial Services, said: “If someone is looking to take out a mortgage to the value of £50,000, it would make sense for that individual to opt for the higher rate of interest option because £2,000 is a sizeable amount in relation to the loan. The reverse is true for those seeking to take out a larger loan.
“We are seeing quite a large number of investors coming back into the property market. A lot of people do not like the risk involved in investing money in stocks and shares or bonds, given the level of market volatility at this time. Putting money into a savings account is not appealing either because of the lowly interest rates.
“The buy-to-let industry has entered a new normal with stamp duty at 3 per cent. However, not a lot of people are aware that buy-to-let tax relief has been scrapped.”
Charges
Fee free, £999 or £1,999.
Verdict
Few could have predicted a decade ago that buy-to-let mortgage rates at 75 per cent would plummet to sub 3 per cent. Industry research points to the fact that borrowers are revelling in the low mortgage rate environment. Longer term fixes are likely to appeal to individuals with a penchant for budgeting who have no intention of selling their investment in the near future.
As Mr O’Brien said, property is becoming an increasingly popular investment vehicle given the sheer amount of volatility in markets across the globe. However, clients should always remember that investing in property is not devoid of risk and can be arduous.
