Buy-to-let mortgages getting cheaper
The buy-to-let specialist lender found that the average fixed rate product was priced at 4.67% during the last three months of the year, falling from 4.88% in the previous quarter.
The fall in fixed rates now means the difference between fixed and variable rates is now at its lowest level in over two years. The average variable rate product stood at 4.42% in the fourth quarter of 2012.
However, the average LTV level was on the rise during the same period, growing to 73.11%. LTVs had previously been steady at around 65% until the end of 2011 but the last four quarters had each seen a jump in the average level.
These changes in the market meant the average loan size grew by £17,815 to £156,661 at the end of the year.
Andy Young, chief executive of TBMC, said: “This significant uplift has been reflected in a greater choice of products being offered by a wide range of lenders. In fact TBMC placed buy-to-let mortgage business with 27 different lenders during 2012.”
“Generally speaking, the expansion of the buy-to-let market has led to greater competition between providers and as a result there are some very good deals currently available. What is notable about the last quarter is the trend for lower fixed rates, with the average buy-to-let fixed rate mortgage offer processed by TBMC at 4.67%, down from 4.88% in the previous quarter.
“This suggests that the government’s fiscal measures, including the Funding for Lending Scheme, are enabling lenders to offer lower interest rates to borrowers, and may also reflect falling swap rates during Q4 2012.”