Landlords now have to pay as much as £40 extra per property because of interest rate rises.
That’s the calculation of online broker Property Master which says two recent increases in the Bank of England base rate have fed through, leading to big increases in the cost of buy-to-let fixed rate mortgages.
The cost of two-year fixes saw the biggest movement with the average rate increasing by up to 0.3 per cent adding typically an additional £40 to the monthly cost once fees are included.
The biggest increase was in the cost of a buy-to-let Standard Variable Rate mortgage which now stands at an average of 4.99 per cent, an increase of 0.25 per cent since the Bank of England begun increasing the base rate last December, adding £31 to the monthly cost.
This is for a typical landlord loan of £160,000.
Angus Stewart, chief executive of Property Master, says: “Whole product ranges have been withdrawn and then relaunched by several lenders, but the outcome has usually been to increase the cost to landlords.
“We are now in a rising interest rate environment and most commentators expect another rate rise next week when the Bank of England meets again on Thursday, March 17.
“With inflation continuing to increase, exacerbated by global events, we foresee additional base rate increases over recent months. We can already see lenders preparing to raise rates again so tightening the squeeze still further on consumers and landlords alike.”
The cheapest typical buy-to-let mortgage is for a two-year fixed rate mortgage, for £160,000 with a Loan To Value of 60 per cent, which moved up from 1.76 to 2.06 per cent, an increase in monthly cost from £271 to £311 once fees are included.
The increase was less for the more popular five-year fixed rate mortgages. A typical five-year fixed rate buy-to-let mortgage with an LTV of 60 per cent again for £160,000 increased from 1.98 to 2.23 per cent up 0.25 per cent or £33 per month.
Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.