Cheapest EVER buy-to-let fixed rate mortgage launched
The Post Office has launched the cheapest ever buy-to-let fixed rate mortgage deal.
According to financial information site Moneyfacts, the 1.33% two-year fixed rate is the cheapest deal ever offered to landlords. It comes with a £1,495 fee, and requires 40% equity and is only available direct from the lender.
It is slightly cheaper than the 1.34% rate available from Platform for borrowers at the same LTV, though that deal comes with an even bigger fee at £1,999 and is available through brokers.
Post Office Money, which scooped five awards at this year’s 2017 YourMoney.com Awards, has been targeting the buy-to-let sector, with a host of deals including a three-year fixed rate at 2.38% for landlords with 25% equity and willing to pay the product fee of £1,495.
See YourMoney.com’s How to Buy-to-Let mortgages for what you need to know.
Falling BTL costs
The latest figures from Mortgage Brain found that buy-to-let costs are falling across the board, with the cost of an average 70% LTV two-year fixed rate now 4% lower than in May this year. Meanwhile five-year fixes at 60% and 80% LTV are down in cost by 3%.
David Hollingworth, associate director at L&C, said that across the market lenders were under pressure to either price more competitively or adapt their criteria in order to meet landlord requirements.
He said: “Competition is strong, so what we tend to see is lenders pulling both of those levers. There are some lenders that are more specialist than others and so are able to deal with some types of property or borrowers that mainstream lenders won’t, but when it comes to price and criteria it’s about getting the right blend.”
Nonetheless, the buy-to-let market remains in a tricky position. New data from UK Finance revealed that both gross buy-to-let lending and the number of loans had fallen 6% in the second quarter of 2017, a trend blamed on the succession of tax and regulatory changes the sector has seen.
A spokesperson for Moneyfacts said: “Post Office Money is causing a storm in the buy-to-let market by launching some competitive market-leading rates. Priced at 1.33% for two years landlords can now lock into the cheapest ever fixed deal on Moneyfacts.co.uk records, as a result this deal is likely to be a cost-effective option for many.”
“Borrowers looking for a low rate will not be disappointed, however with a large fee borrowers will need to look at the true cost to ensure they get the most cost effective option for them.”