house prices high

Buy-to-let mortgage costs continue downward trend

Data released by Mortgage Brain have revealed that buy-to-let (BTL) mortgage costs continued to fall over the last three months, offering some festive cheer to landlords.

This year has seen a downward trend in the cost for the majority of BTL mortgages, with the greatest savings to be made on longer-term fixed-rate deals. Landlords could make a yearly saving of £360 on a 70% loan-to-value (LTV) five-year fixed rate on a £150,000 mortgage when compared to last year, as rates are on average 4.4% lower.

A two-year fixed rate is 1.7% lower than 12 months ago, saving £126 on a £150,000 60% LTV mortgage, and rates continue to stay low on 70% LTV two-year trackers with no significant changes over the last three months.

Mark Lofthouse, chief executive officer of Mortgage Brain, said: “Our latest BTL quarterly analysis shows some cost reductions over the last three months.”

“When viewed over the course of 2019, they show that there has been a continuous reduction in rates resulting in substantial price reductions, particularly for five-year fixed rate products.”

Rates expected to fall further in the new year

According to online mortgage broker Property Master, the cost of fixed-rate buy-to-let mortgages are set to fall further following the Conservative’s election win.

Angus Stewart, chief executive of Property Master, said: “…we believe there is every chance rates will fall still further. Firstly, the Conservative victory, even before it happened, strengthened the pound so removing one factor that could have encouraged the Bank of England to increase rates.

“Secondly, two members of the Bank’s Monetary Policy Committee voted for lower rates last time around, which makes us think downward is more likely to be the next movement in the base rate. The stars are aligned for lower mortgage rates for hard-pressed landlords in the New Year.”

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