Getting cheaper

According to Mortgage Brain’s quarterly product data analysis, the cost of a 60% LTV two-year fixed buy-to-let mortgage is now 1.9% lower than it was three months ago, which represents an annual saving of £144 on a £150k mortgage. The cost of a 70% LTV three-year fixed buy-to-let mortgage has fallen by 1.1% – an annual saving of £90 on a £150k mortgage compared to three months ago. The Mortgage Brain data also shows that borrowers looking to fix for longer can benefit from better annualised savings. For example, a 80% LTV five-year fixed buy-to-let mortgage is now 3.5% lower compared to 12 months ago, representing an annual saving of £324.

One factor driving down the costs of BTL mortgages is the number of products now available on the market. The Mortgage Brain analysis revealed that there are now 3,859 BTL products on the market from mainstream lenders, which represents an increase of 11% compared to a year ago.

The Mortgage Brain analysis also reveals that the cost of buy-to-let mortgages remains higher when compared to mainstream residential mortgage products. Data on (1 September 2019) shows that the cost of an 80% LTV five-year fixed product is over 16% higher than the same product for a residential mortgage.

The difference in the cost of tracker mortgages are less, with the cost of a two-year 70% LTV tracker buy-to-let being 4.75% higher than the residential equivalent.

Overall the message for the BTL market is positive; especially for investors looking to fix for a longer term. The cost of BTL mortgages continue to reach historic lows, with the market remaining competitive given the number of BTL mortgages currently on the market.

If you would like to know more about a new or re-mortgage please do make contact and one of our independent advisers will be happy to assist.