Buy-to-let mortgage costs remain at record lows, but there are growing signs that borrowing costs and rates in the sector could be entering a period of stabilisation, or even increase over the past three months.
Fresh product data analysis from Mortgage Brain shows that the BTL sector may have reached a plateau following strong year-on-year reductions in the cost of BTL mortgages spanning the past three years.
The cost of an 80% LTV two year fixed, for example, is now 18% lower than it was at the start of 2014 and 11% lower than it was a year ago.
Similarly, the lowest rate three year Fixed BTL with an 80% LTV - at 3.39% - is now 16% lower than it was three years ago and 10% lower than last year.
BTL investors favouring longer term deals can also benefit from the savings with Mortgage Brain’s latest figures revealing that the cost of a 60% loan-to-value (LTV) five year fixed BTL mortgage is now 15% lower than it was in 2014, while its 70% and 80% LTV counterparts are 14% and 11% lower respectively.
Despite the long period of reducing mortgage rates, however, Mortgage Brain’s short term analysis shows signs of potential stabilisation with mixed movement in the cost of all main BTL products over the past three months.
A three year fixed BTL mortgage with an 80% LTV, for example, now costs 4% less than it did three months ago, while the cost of a two year Fixed (60% and 80% LTV), a three year fixed at 70% LTV and a five year fixed with a 60% LTV are all down by just 1% compared to November 2016.
By comparison, a marginal 1% increase in cost has been recorded for a two year Tracker BTL mortgage with a 70% LTV, whereas a two year Fixed at 70% LTV, a two year Tracker at 60% LTV and a five year fixed BTL mortgage at 70% and 80% LTV have all remained inactive with mortgage costs remaining static with those offered at the beginning of November 2016.
Mark Lofthouse, CEO of Mortgage Brain, said: “Like our recent residential mortgage product analysis the Buy To Let sector looks like it could be levelling out and moving away from the long period of historic lows in terms of costs and rates.
“Buy to let investors can still take advantage of some good savings and low rates when compared to this time last year, however, the mixed and marginal movement in costs over the past three months could be seen as a further sign of stability, or even the start of a period of rises.”