Buy-to-let mortgage rates are rising but landlords aren’t short of options


The biggest beneficiaries of low-interest rates over the past 10 years were buy-to-let landlords, with mortgage payments dropping by more than £4,000 per year between 2007 and 2017. However, as interest rates begin to rise, the outlook could be bleaker for landlords.

According to data from Mortgage Brain, cost increases have started appearing over the past three months. A two-year buy-to-let tracker at 60 or 70% loan to value (LTV) is currently 3% higher than it was in November 2017, with average current rates of 1.79% and 2.14% respectively. A two-year fixed rate with an 80% LTV is 2% higher than it was three months ago at 3.44%. With further base rate rises expected this year, prospective landlords and property investors will need to do their research to find the best deals.

Buy-to-let mortgage products are at new high

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However, the buy-to-let sector has performed well over the past year in terms of product numbers and availability. During 2017, there was a 32% increase in the overall buy-to-let mortgage products available, bringing the number available up to 2,959 in January 2018. For those landlords looking for longer-term security, five-year fixed rates with a 70% LTV fell by 2% last year, and the same product with a 60 or 80% LTV fell by 1%.

Mark Lofthouse, CEO of Mortgage Brain, said: “Buy-to-let product numbers are at a new high, and there are still pockets of cost reductions and savings to be had for potential landlords and property investors.

“With the BTL market set to become even more complex in 2018 though, we might be on the start of a new path in terms of mortgage cost movement compared to the past few years.”

Property investors doing their research will still be able to find good rates on longer-term mortgages. Plus, the buy-to-let sector continues to look buoyant with Virgin Money announcing that it expects to be entering the portfolio landlord market this year; adding to the array of mortgage product choices available.

While rates are set to rise, the range of choice and availability of longer-term fixed mortgage products will still benefit many landlords looking to remortgage or make a purchase this year.

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Buy-to-let mortgage rates are rising but landlords aren’t short of options


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