The cost of most mainstream buy-to-let mortgages is starting to climb, according to new data from Mortgage Brain.
Over the past three months, since Base Rate rose to 0.5% from 0.25%, the cost of a two-year buy-to-let tracker with a 60% and 70% LTV, is now 3% higher. With a current rate of 1.79% and 2.14% respectively (as of 1 February 2018), the 3% rise equates to an annualised increase of £216 on a £150,000 mortgage.
The cost of an 80% LTV two-year fix at 3.44% is now 2% higher than it was three months ago, while its 60% and 70% LTV counterparts, and a 70% LTV three-year fix, are all 1% higher than they were at the beginning of November 2017.
Longer-term deals are faring better with Mortgage Brain’s latest data showing a 2% reduction in cost over the past three months for a 70% LTV five-year fix. For the same product with a 60% and 80% LTV, the cost reduction is 1%.
Rise in product numbers
Despite the recent fluctuations in rates and costs, the buy-to-let sector has also seen the strongest performance in terms of product numbers and availability over the past year.
An additional 721 products were introduced into the buy-to-let market during 2017, representing a 32% increase in overall product availability – up from 2,238 in January 2017 to 2,959 as of 15 January 2018.
Mark Lofthouse, CEO of Mortgage Brain, commented: “It looks like the Prudential Regulation Authority changes, coupled with what could be seen as the start of a number of interest rate rises, is starting to affect the cost of mainstream BTL mortgages.
“Buy-to-let product numbers are at a new high, however, and there are still pockets of cost reductions and savings to be had for potential landlords and property investors. With the BTL market set to become even more complex in 2018 though, we might be on the start of a new path in terms of mortgage cost movement compared to the past few years.”
Source: Mortgage Finance Gazette