Buy-To-Let mortgage costs start to climb
27 February 2018
Cost of a 60% and 70% LTV 2yr Fixed up 3% since November 2017
2yr Fixed (80% LTV) now 2% higher
BTL products see biggest increase in product availability – up 32% over 12 months
UK, FEBRUARY 27, 2018: Following several periods of change and uncertainty in 2017, leading to November’s eventual rise in interest rates, the cost of most mainstream Buy-To-Let mortgages is starting to climb with new data from Mortgage Brain showing a number of cost increases over the past three months.
The cost of a two year BTL Tracker with a 60% and 70% LTV, for example, is now 3% higher than it was in November 2017. With a current rate of 1.79% and 2.14% respectively (as of 1st February 2018), the 3% rise equates to an annualised increase of £216 on a £150,000 mortgage.
The cost of an 80% LTV two year Fixed (at 3.44%), is now 2% higher than it was three months ago, while its 60% and 70% LTV counterparts, and a 70% LTV three year Fixed, are all 1% higher than they were at the beginning of November 2017.
There is some better news for borrowers looking for a longer term deal, however, with Mortgage Brain’s latest data showing a 2% reduction in cost over the past three months for a 70% LTV five year Fixed and a 1% cost reduction for the same product with a 60% and 80% LTV.
Despite the recent fluctuations in rates and costs, the Buy-To-Let sector has also seen the strongest performance in terms of product numbers and availability over the past 12 months.
An additional 721 products were introduced into the UK BTL market during 2017, representing a 32% increase in overall product availability – up from 2,238 in January 2017 to 2,959 as of 15 January 2018.
Mark Lofthouse, CEO of Mortgage Brain, comments, “It looks like the Prudential Regulation Authority changes, coupled with what could be seen as the start of a number of interest rate rises, is starting to affect the cost of mainstream BTL mortgages.
“Buy-To-Let product numbers are at a new high, however, 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.”
