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Lowest ever average buy-to-let rates

Lowest ever average buy-to-let rates

Category: Buy To Let

Updated: 10/02/2015
First Published: 10/02/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Landlords, we have some good news – you can now take advantage of the lowest buy-to-let (BTL) mortgage rates ever recorded! Research from Moneyfacts.co.uk has confirmed that the average cost of both fixed and variable borrowing is falling, with the average fixed rate BTL deal currently at its lowest ever level.

Increasing competition = lower rates

Competition in the sector has ramped up of late, with providers not only increasing their product choice, but making those products highly attractive. The number of BTL mortgages available has risen from 757 to 811 in a single month – meaning there's now far more choice for landlords seeking to secure a good deal – and at the same time, the average rate has fallen significantly.

The average fixed rate BTL mortgage currently stands at the lowest level ever recorded, priced at 3.82% across all terms, marking a reduction of 0.4% in the last year (down from 4.22% in February 2014). The average variable rate BTL has fallen even further, now standing at 3.63%, a drop of 0.54% from February 2014, when the same mortgage was priced at 4.17%.

Providers are actively competing for BTL business, and when you factor in a few external factors, it's no wonder. "When you consider how dire savings rates are it is hardly surprising that BTL is proving popular with investors, and this is likely to increase once the rules relaxing the drawdown of pension pots in April come to fruition," said Sylvia Waycot, editor of Moneyfacts.co.uk.

Does this mean there's the potential for BTL rates to fall even further? Arguably, yes, as the new pension freedoms mean more would-be landlords could raid their pot and invest it in property, and providers will seek to accommodate this growing market. Savings rates aren't exactly setting the world on fire, either, making buy-to-let a viable investment opportunity with the potential for great returns.

Time to take advantage

So, is it time to take advantage of things? Whether you're a seasoned landlord or just starting to think about getting in on the action, now would be a great time to consider your options. Product choice is increasing and rates are falling – a perfect combination – so compare the options and see if you can find a deal to start, or expand, your portfolio.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.