Buy-to-let landlords can now choose from more than 2,000 mortgages according to a financial information website Moneyfacts.
In October 2007 there were 3,305 buy-to-let products on the market, but the 2008 crash changed the face of the mortgage industry. The buy-to-let sector has born the brunt of tax and rule changes in recent years, but finally, things are looking up. Today, landlords can choose from 2,162 mortgages, including 467 for limited company landlords not using special purpose vehicles; the highest number available in over a decade.
Higher rates, but lower deposits
There might be more deals to choose from, but the rates for buy-to-let mortgages are not falling, as Moneyfacts confirms an increase in the average two–year fixed rate of 0.20% since September 2018 and a steady increase over the past 18 months.
However, rates may be on an upward move, but lenders, it seems are using lower deposit mortgages to tempt landlords onto their books. Vida Homeloans are now offering an 85% loan-to-value (LTV) buy-to-let mortgages and is one of the highest LTV products on the market. Vida joins both Kent Reliance and Kensington Building Society which both offer 85% LTV buy-to-let mortgages.
Lower deposits mean that existing landlords can look to expand their portfolios without having to stump up the hefty 25% down payment. However, as lower deposit mortgages carry more risk higher interest rates should be no surprise. Both Vida and Kensington offer a two-year fixed rate of 4.49 per cent with a £1,995 product fee, and Kent Reliance’s two-year deal is fixed at 5.19 per cent with a 2.5% fee of the mortgage amount.
Opportunities to lock into low rates are available
As future economic uncertainty continues to influence lenders’ view of the buy-to-let market, landlords seeking to purchase or remortgage might do well to take advantage of the myriad of choices currently available.
According to Moneyfacts, Barclays has reduced rates across its buy-to-let purchase and remortgage range, including in a 1.79% fixed rate until April 2022 on a 75% LTV, with an incentive package. Another offering an incentive package is Yorkshire Building Society whose five-year fixed rate is available for 1.96% on a 75% LTV, with a free valuation and £500 cashback. Landlords looking to remortgage should take a look at Skipton Building Society and HSBC UK. Both are offering incentivised low two-year fixed remortgage deals.
With average rates sitting at 3.12% for a two-year fixed, 3.61% for a five-year fixed, and limited companies looking at 4.08% and 4.53% respectively, and the biggest choice in mortgage deals available for 12 years, it‘s certainly worth investigating the opportunities available before rates rise again.