Landlords: Now you can lock into record low five-year fixed rates
Five-year buy-to-let fixed rates have returned to record lows, according to Moneyfacts.
The financial information provider said the average five-year fixed rate for landlords has fallen to 3.43% – a joint record-low, which was last seen in October 2017.
A year ago five-year deals were an average 3.77%, so why have buy-to-let rates fallen when wider interest rates have gone up?
Ready for the remortgagors
Lenders are competing for business because they expect a surge in landlords looking for a new deal in the next few months.
Two years ago buy-to-let property purchases soared, as landlords moved to avoid a new stamp duty surcharge that was introduced in April 2016.
As Moneyfacts points out, those who took a two-year fixed rate deal back then will be ready to switch soon and this means a big boost for buy-to-let lending. In an attempt to attract these borrowers, lending are chopping rates.
Charlotte Nelson, finance expert at the business, said: “Many borrowers rushed to make purchases in the first few months of 2016, to beat the stamp duty hike. In fact, March 2016 recorded a sharp increase in the purchase of buy-to-let homes. Because of this, a substantial chunk of borrowers are likely to be remortgaging in the coming months.
“In anticipation of this, lenders have started to compete in the five-year fixed rate market to vie for these potential borrowers’ custom. This has seen the average five-year fixed rate fall to the joint lowest on record.”