Data released by the Bank of England shows buy-to-let mortgage rates at 75% loan-to-value are at their lowest since records began in 2012, averaging just 2.27%. This is mirrored by historically low rates for for home purchasers, with average rates of 3.73% for a two-year fixed rate product on 95% LTV.
Looking at some of the best deals available, property investors can choose from rates as low as 1.39%, available from Sainsbury’s Bank, on a two-year fixed rate term up to 60% LTV. This product comes with a £1,495 product fee and is just 0.64% over the base rate.
To encourage more buy-to-let transactions, we have seen lenders withdraw account and admin fees, including Lloyd Bank’s buy-to-let mortgage division BM Solutions which has capped revaluation fees at £300 and removed its £100 admin fee.
Similarly Nationwide’s buy-to-let arm, The Mortgage Works, has withdrawn its fee on a two-year fixed rate at 2.14%. It also offers cashback of £250 on its five-year 75% LTV product at 2.49% with a £1,995 fee.
TSB have also revised their products recently, reducing the rates on selected two, three and 5-year fixed rate mortgages for buy-to-let purchases and remortgage customers.
In fact, my own personal experience has shown me that borrowing money can be just as cheap as it was before the interest rate rises. By remortgaging on a particular property, I have managed to secure a fixed two-year rate of just 1.4%, compared to the 1.64% tracker rate alternative.
For property investors with a portfolio or individual investors looking to expand the number of properties they let. Aldermore has introduced a ‘multi-property’ product, which comes with no fees. It is also available with free standard legal fees and start at 3.48% 75% LTV, and 3.78% 80% loan to value. This product is designed for portfolio landlords looking to collective remortgage multiple properties.
For those landlords wishing to cap their rates long-term, Coventry Building Society are offering a 10-year fix at 2.35% on a 50% LTV. This product comes with a £999 fee.
It seems these moves by the big buy-to-let lenders are proving popular. UK Finance report that in July, there were 14,700 remortgage transactions, up 7.3% year on year. Lenders are not spoilt for choice either, with over 1,000 products available to choose from in the fixed-rate market.
Peter Izard of Investec Private Banking comments on the changing market dynamic: “The BTL market is extremely competitive currently with an ever-growing selection of lenders. With such choice inevitably comes price competition so now is indeed a good time for Buy to Let landlords to consider their options. It is essential though with so many changes arising in the BTL market to ensure that independent Tax and Mortgage advice is sought in the first instance.”
As Peter said, with all finance deals, it is important to look beyond the headline rate and check all fees and terms and conditions. Shop around for the best loan options and, even if you know the market well, always consult an independent letting agent and an independent financial adviser before making any property investment and mortgage commitments. Please do feel free to contact me if I can help or you would like to discuss refinancing in more detail.
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