The majority of fixed rate buy-to-let mortgage rates are continuing to fall, according to the latest research from Property Master.
The online mortgage broker’s tracker for August, which follows a range of buy-to-let mortgages for an interest only loan of £150,000, reveals that the greatest drop in monthly cost was for five-year fixed rate buy-to-let mortgage offers for 50% of the value of a property. The monthly cost of this type of mortgage fell by £13 per month July to August. Five-year fixed rates for 65% of the value of a property dropped month-on-month by £5.
Five-year fixed rate buy-to-let mortgage offers for 75% loan-to-value was one of only two types tracked to show an increase – up £29 per month.
The cost of two-year fixed rate buy-to-let mortgages for 65% of the value of a property fell by £2 per month and for 75% of the value of a property by just £1. Two-year fixed rate buy-to-let mortgages for 50% of the value of a property increased by £4 per month.
The news follows the online mortgage broker’s previous findings last month of an across the board drop in rates which it described as “unprecedented.”
The downward pressure on fixed rate buy-to-let mortgage products looks to be the result of competition amongst lenders for landlord business along with the financial markets expectations that a no-deal Brexit could force the Bank of England to cut the base rate.
Angus Stewart, Property Master’s chief executive, commented: “There have been a slew of rate cuts amongst lenders along with new offers being launched that are looking very attractive to landlords wanting to expand their portfolios or needing to remortgage.
“Good news on rates may well entice some landlords back into the market by helping them offset the many recent regulatory and tax costs they have been struggling to absorb.
“In terms of predicting the outlook on interest rates it clearly has never been more difficult. Brexit uncertainty is continuing, and it would appear the financial markets are taking the latest comments from the Bank of England to signal a cut in rates in the light of a disorderly exit from the European Union.
“If Brexit goes smoothly and some kind of deal is reached then we are more likely to see rates rise in line with the plans to normalise interest rates that the Governor of the Bank of England outlined some time ago.”