As the cost of borrowing for buy-to-let landlords continues to slide, one broker has pinpointed which mortgage product type might save you the most money.
Property Master’s January 2020 Mortgage Tracker has found that the cost of a five-year fixed rate buy-to-let (BTL) mortgage has resumed a downward trend, offering landlords longer-term security at a lower cost.
The biggest month-on-month fall was £15 from December to January on 5-year fixed-rate buy-to-let mortgage offers for borrowers with a 50% loan to value (LTV). Landlords looking to fix on 65% LTV saw a month-on-month drop of £11 and those seeking a 75% LTV fixed mortgage saw a fall of £3.
Angus Stewart, chief executive at Property Master, said: “We did detect the buy-to-let market, as with many other sectors, was holding its breath until the election was out of the way.
“Now with such a clear, decisive victory, we would expect confidence to return, and our latest research has shown that this is being seen in a fall in the cost of borrowing.”
Reduced rates relieve some of the pressure
Much of the downward trend in mortgage rates is attributed to the ongoing competition between lenders for new business, which if a lower Bank of England base rate is truly on the cards will give them even greater scope to cut rates further.
2020 is set to be a tough one for landlords as the traditional tax relief on mortgage interest is finally phased out in April. From this year, those renting out their own previous home also become subject to full capital gains tax when they come to sell. Landlords also have to prepare to meet the new level of minimum Energy Efficiency Standards, and the ban on tenancy fees will be extended to all existing tenancies.
Any reduction in the cost of borrowing will certainly help landlords offset some of these new pressures, and they can also benefit from lenders stepping up with greater incentives to attract their business, too.
