Recent research from Moneyfacts.co.uk has revealed that buy-to-let mortgage costs have started to fall in the second quarter of 2019 – despite continuing economic uncertainty.
Looking at the average cost of a two-year fixed rate buy-to-let mortgage reveals that this now stands at 3.01% – some 0.10% lower than the figure of 3.11% seen at the start of the year. In addition, the average rates for both three-year fixed and five-year fixed buy-to-let mortgage products, which currently stand at 2.75% and 3.5% respectively, have also decreased – down from 3.02% and 3.56% in January – seeing reductions of 0.27% and 0.06% respectively.
Closer examination of the data also shows that buy-to-let mortgages at the higher loan-to-value (LTV) brackets have seen the greater reductions in interest rates. For example, the average two-year fixed mortgage rate at 75% LTV mortgages stood at 3.16% at the start of the year, whereas now it stands at 3.02% – a decline of some 0.14%. Moreover, 70% and 80% LTV two-year fixed rate buy-to-let mortgages have also seen a drop in average interest rates since the start of this year . 80% has reduced from 3.81% to 3.75% and 70% from 3.49% to 3.45%.
Meanwhile, it is the three-year fixed mortgage figures that have seen the most drastic reductions, with average rates for 80% LTV products falling by a whopping 0.75%, from 3.94% in January 2019 to its current average figure of 3.19%.
Similarly, the five-year fixed buy-to-let mortgage products average interest rates have also fallen, although by smaller degrees, from 3.56% to 3.5%. Interestingly unlike the shorter-term buy-to-let mortgages, the largest decrease for five-year products was at 60% LTV with a reduction in the average rate of 0.13% from 2.64% at the start of the year. While 80% and 70% LTVs saw no change in average rates at all.
Moneyfacts.co.uk’s research also recently revealed that first-time landlords were actually being offered much greater choice than was the case five years ago. Taken with today’s news about falling costs, it is easy to see why this is a time of increasing opportunity in the BTL market.
To see the best mortgage deals available right now, why not take a peek at our whole of market buy-to-let comparison charts.
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 Any products featured may be withdrawn by their provider or changed at any time.