Buy-to-let mortgage rates fall as product numbers continue to swell
The average costs of buy-to-let (BTL) mortgages have continued to fall as competition in the market remains strong.
According to data from technology firm Mortgage Brain, there are now 3,859 BTL products on the market from mainstream lenders, representing an increase of 11 per cent compared to a year ago.
This it said was one of the main factors in driving down interest rates.
Bigger falls at longer terms
The sourcing system also revealed some of the biggest savings in the BTL market have been created within longer product terms.
Average five-year fixes at 70 per cent and 60 per cent loan to value (LTV) have fallen by 1.75 per cent and 2.06 per cent respectively in the last three months alone.
Meanwhile the average 80 per cent LTV five-year fixed BTL mortgage is now 3.5 per cent lower compared to 12 months ago, representing an annual saving of £324 on a £150,000 loan.
The average cost of a 60 per cent LTV two-year BTL fix is now 1.9 per cent lower than it was three months ago, with a 70 per cent LTV three-year fix falling by 1.1 per cent.
These falls offer a £144 and £90 saving respectively on a £150,000 mortgage.
Residential rates cheaper
The Mortgage Brain analysis also revealed that the cost of BTL mortgages remains higher when compared to mainstream residential mortgage products.
An 80 per cent LTV five-year fix is more than 16 per cent higher than the same product for a residential mortgage.
However, when it comes to the cost of tracker mortgages, the differences are less, with the cost of a two year 70 per cent LTV tracker being just 4.75 per cent higher than the residential equivalent.
Mortgage Brain CEO Mark Lofthouse said: “Overall the message for the BTL market is positive; especially for investors looking to fix for a longer term.
“The cost of BTL mortgages continue to reach historic lows, with the market remaining competitive given the number of BTL mortgages currently on the market.
“Nevertheless, the market remains clouded by the ongoing political uncertainty, the looming Brexit deadline as well as the weakening economic forecast.”