"The rise in costs for the three year fixed and two year tracker mortgages could be a sign that BTL lenders are starting to look at minimising risk amidst further Brexit uncertainty."
Mortgage Brain analysis show that the cost of a two-year fixed buy-to-let mortgage with an 80% LTV is now 4% lower than it was in August 2016.
With a current rate of 3.34% (as of 1st November 2016) the reduction in cost equates to a potential annualised saving of £324 on a £150k mortgage.
The longer term analysis for this product paints an even better picture with Mortgage Brain’s data showing a 5% drop in cost compared to May 2016 and an 11% fall compared to this time 12 months ago. In financial terms, the 11% reduction in cost equates to a potential annual saving of £1,098.
At 2.40%, a two-year tracker mortgage with a 70% LTV now costs 3% less than it did three months ago and offers landlords an annualised saving of £234.
Longer term deals have also seen reductions, with the cost of a five-year fix at 60% LTV now 2% less than it was at the start of August 2016 and 3% less when compared to six months ago.
While seeing very little movement over the past three months the lowest rate five-year fix with a 70% LTV now costs 6% less than May 2016 and 9% down in cost compared to 12 months ago. With a rate of 2.56%, the 9% cost reduction equates to an annualised saving of £846 on a £150k mortgage.
It’s not all good news, however, with Mortgage Brain’s data showing cost increases for some buy-to-let mortgages. A three-year fixed BTL product at 70% LTV, for example, now costs 3% more than it did in April and an 80% LTV two-year tracker now costs 4% more than it did three months ago.
Mark Lofthouse, CEO of Mortgage Brain, commented: “The rise in costs for the three year fixed and two year tracker mortgages could be a sign that BTL lenders are starting to look at minimising risk amidst further Brexit uncertainty.
“There’s no doubt though that on the whole potential BTL investors remain in a great position to take advantage of the low rates and cost reductions that we’re continuing to see.”
