The best buy-to-let mortgage rates 07.10.20 | moneyfacts.co.uk

Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 07/10/2020

The best buy-to-let fixed rate mortgages

Provider

Rate

Initial rate period

Product fee

How to apply

The Mortgage Works

1.19% fixed

Two years

2% of advance

Broker only

Virgin Money

1.67% fixed

Three years

£1,995

Speak to lender

Birmingham Midshires Solutions

1.62% fixed

Five years

£1,995

Broker only

The Mortgage Works is a part of Nationwide Building Society and only offers its buy-to-let mortgages through mortgage brokers. It continues from last month to offer the best rate for a two-year fixed rate buy-to-let mortgage. It offers a rate at 1.19% (4.4% APRC) fixed until 30 November 2022 and after this the rate increases to 4.74% variable. The fee is 2% of the mortgage. Landlords will need to have a loan-to-value (LTV) at 65% and be able to achieve a rental income that is 125% of the mortgage interest. The Mortgage Works uses a rate of 5.50% to calculate mortgage interest for this requirement. Landlords must have no more than 10 properties (excluding residential) to be eligible for this mortgage.
Virgin Money has reduced the rate on its three-year fixed rate buy-to-let mortgage from 1.80% last month to 1.67% fixed until 1 January 2024, and after this the rate increases to 4.54% variable (4.2% APRC). This mortgage is available at 60% LTV. The fee is £1,995 and there is cashback available of £250 for a new buy-to-let purchase or £300 for a buy-to-let remortgage. Free valuation is also included.
The minimum income required is at least £25,000 and landlords will need to be less than 85 at the end of the mortgage term. The rental income required is 145% of mortgage interest and Virgin Money uses a rate of 5.50% to calculate the mortgage interest. Virgin Money will also accept income multiples. There is a maximum of three buy-to-let properties allowed.
Birmingham Midshires Solutions (BM Solutions) retains the best rate for a five-year fixed rate buy-to-let mortgage this month – and it is only available from a mortgage broker. BM Solutions offers a rate of 1.62% (3.5% APRC) fixed until 31 December 2025, after which this the rate increases to 4.44% variable. The maximum LTV is 60% and landlords cannot be older than 80 at the end of the mortgage term. The rental income must be 125% of mortgage interest calculated at a rate of 5.25%. Landlords cannot have more than 10 buy-to-let properties to be eligible for this mortgage.

The best 80% LTV buy-to-let mortgages

This month, Loughborough Building Society has the lowest rate available for a buy-to-let mortgage at 80%. It offers a discounted variable rate of 2.99% (5.2% APRC) for two years. The discounted rate is calculated by subtracting 2.35% from 5.34% the lender’s standard variable rate. If the lender increases its standard variable rate, then the discounted rate would also rise. The lowest rate this mortgage can have is 2.00%. There is a fee of £999 for this mortgage. The rental income must be 130% of the mortgage interest calculated using a rate of 5.50%. Landlords must earn at least £25,000 per year and cannot be older than 70 at the end of the mortgage term. There is a maximum of three properties allowed.

The best buy-to-let limited company mortgages

State Bank of India and Hinckley & Rugby Building Society both offer the lowest rate for a buy-to-let mortgage available to those with a limited company at 2.74%. However, the State Bank of India offers this as a fixed rate, while Hinckley & Rugby Building Society offers a discounted rate. Both offer the rate for a period of two years.
State Bank of India has a rate of 2.74% for two years, after which it reverts to 4.74% variable. This mortgage is available up to 60% LTV. The fee is 1.25% of the mortgage loan. There is no limit on the maximum properties allowed and rental income must be at least 125% of mortgage interest calculated at a rate of 5.50%. Landlords needing to remortgage also get refunded valuation fees and £300 cashback.
Hinckley & Rugby Building Society also has a discounted variable rate of 2.74% for two years that increases to 5.89% once this finishes. The discount applied is 3.15% to the lender’s standard variable rate of 5.89%. This mortgage is available up to 70% LTV. The fee for this mortgage costs £1,500 . There is a minimum income requirement of £25,000 and the property must achieve a rental income that is 145% of mortgage interest calculated using a rate of 5.50%.

The best first-time landlord buy-to-let mortgages

This month, NatWest continues to offer the lowest rate for a buy-to-let mortgage available to first-time landlords. It offers a rate of 1.35% (3.7% APRC) fixed until 31 December 2022. The fee is £995 and landlords must be under 70 before the mortgage term ends. Landlords need a minimum income of £25,000 and the rental income must be 135% of the mortgage interest calculated at 5.50%. This lender also accepts income multiples.

Landlords can speak with our preferred mortgage broker to find out more about the best deals available and to help them find the right lender for their properties.

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.

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