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Buy-to-let mortgage rates plummet to record lows

Buy-to-let investors are continuing to enjoy a fall in mortgage rates, particularly those looking for longer-term fixed rates, following last month’s base rate cut from 0.5% to 0.25%.

New research by Moneyfacts.co.uk shows that the average fixed rate at 75% loan-to-value (LTV) has fallen by 0.49% over the past six months taking this rate to below 4% for the first time ever.

With savings rates at record lows, many savers that once used their interest to supplement their income are looking elsewhere, and as bricks and mortar is often deemed a ‘safe bet’ an increasing number of people are looking at buy-to-let as an investment option, according to Charlotte Nelson (right), finance expert at Moneyfacts.co.uk. 


She said: “The reduction in the Bank of England Base Rate to 0.25% has already affected BTL rates, with the average five-year fixed rate at 70% LTV falling by 0.15% in just one month. In fact all LTVs for five-year fixed rates have reached the lowest in the market this month.”

But while the costs of obtaining a buy-to-let mortgage are being driven down, Nelson pointed out that there are other costs to factor in, such as the stamp duty surcharge that was introduced in April this year and the tax relief changes that are coming into play next year.

The finance specialist continued: “As five-year fixed rates get ever lower, and with more calls for longer-term tenancy agreements, we could perhaps see a shift in the focus of the buy-to-let landlord whereby the investments become a more long-term prospect.

“Low rates may make a buy-to-let investment an attractive option, but borrowers should remember that a buy-to-let investment is not without its risks, so it is important for any potential landlords to seek financial advice to see if buy-to-let is the right option for them.”

BTL Average Rates Five-Year Fixed Rates

A Year Ago

Six Months Ago

One Month Ago


60% Loan-to-value





70% Loan-to-value





75% Loan-to-value





Source: Moneyfacts.co.uk



Compiled: 21.9.16

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