Rates are still falling but for how long?

Research shows that the average two-year fixed BTL mortgage rate has fallen by 0.35% in just one year, and even though the pace of the fall has slowed in recent months – the vast majority of that decrease took place last year.

The figures also show that the market has now recovered from the significant drop in products that was seen at the start of this year, suggesting that landlords can benefit not only from low rates, but also a higher number of mortgages to choose from. The choices have also increased in the limited company sector as well.

The BTL market has seen some turbulent times, with significant tax changes, tougher affordability rules, and still more changes to come. Yet, rates have continued on a downward spiral.

New regulation brought tighter affordability rules into play, effectively reducing the amount that landlords can borrow. This had a knock-on effect on availability, and indeed the pace of rate cuts, yet it seems that the market is recovering.

Fixed rate mortgages are now proving to be very popular with landlords as they look to fix ongoing expenses. Low loan-to-value mortgages are now proving better value than their tracker equivalents at 2, 3- and 5-year periods so check out the deals on offer.

Even for fixed rate higher loan-to-value mortgages, the current cost of borrowing is only marginally higher than tracker products. Fixed rate plans are without doubt becoming more popular especially with the investor with multiple properties.

A recent survey of landlords showed they are looking to the long term and wanting to know the outgoings will be fixed, thus giving stability.

If you are looking for a new or wish to review your current mortgage please do make contact and one of our independent advisers will be happy to assist.