Buy-to-letFeb 9 2017

Buy-to-let fixed mortgage rates reach all-time lows

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Buy-to-let fixed mortgage rates reach all-time lows

Average two- and three-year fixed mortgage rates for landlords are at an all-time low, according to the results of the Buy to Let Mortgage Product Index by Mortgages for Business.

The average prices for two- and three-year fixed rates are currently 2.92 per cent and 3.76 per cent respectively, the survey for January found.

Meanwhile five-year fixed rates crept up for the second month in a row and now average 3.77 per cent, exceeding the average price of three-year fixed rates for the first time since January 2015.

David Whittaker, chief executive of Mortgages for Business, said: “Longer term swaps in particular have risen in recent months, so it’s no surprise that pricing for five year fixed rates have started to creep up.

“However, when looking at the bigger picture, these rates are still, on average, less than 1 per cent more than their shorter term counterparts.

“As such, we continue to recommend them to customers as they not only provide a longer period of security against rate rises in an uncertain market, they can also save landlords the time and money it costs in remortgaging more often.

“At the very least, landlords should consider having some properties mortgaged on longer term fixes to spread risk. The fact that these rates are beginning to rise now should prompt landlords to take action sooner rather than later.”

The index also found January was a good month for short-term tracker products, with two year buy to let tracker rates again at an average of just 2.81 per cent, having remained unchanged from December.

Ian Gwinnell, director of Midlands-based All Counties Financial, said uncertainty about the future direction of the British economy was pushing rates for longer fixes up.

He said: “We saw in the last Budget and with Brexit that even our country’s top economists cannot predict what’s going to happen over the course of 12 months.

“Because they are unsure about the economy they will pitch themselves slightly higher to give themselves some protection.”