Brand new research from Property Master, the online mortgage broker, reveals good news about buy to let mortgages. Their research indicates that the popular buy to let mortgages based on a five year fixed rate are still falling and have been since the start of 2018.
Property Master is a startup company that has developed algorithms which allow landlords to enter their specific requirements and then find the best buy to let mortgage deals. The news of the continued fall in these mortgages is good news for landlords who are bracing themselves, as well as consumers at large, about a possible interest rate rise in early August 2018.
Fixed Rate Mortgages are a popular choice for Buy to Let
Buy to let property investors are turning to fixed rate mortgages more and more. A lot of landlords feared that there would be a rise in mortgage rates but the reverse has actually happened according to the Property Master research.
It is unclear what has led to the fall in the cost of five year fixed buy to let mortgages. There has certainly been a shift to these types of mortgages by many landlords which may well be a factor. Whatever the reason it is good news for property investors and something that should be taken advantage of while the going is good.
What were the Numbers involved?
Property Master uses a mortgage tracker which follows different buy to let mortgages based on a £150,000 interest only loan. The rates for mortgages that represent 50%, 65% and 75% of property values has been falling continuously since the beginning of the year.
In real terms this means that you would save £11 each month on a 50% mortgage, £24 on a 65% mortgage and £13 on a 75% mortgage each month. It was not the same for two year fixed rate mortgages which were reasonably stable from the start of 2018 although investors could make savings on a 65% value mortgage.
The figures include application and product fees. Some of the biggest financial institutions that provide buy to let mortgages were analysed including RBS, Barclays, Godiva, BM Solutions, Precise and the Mortgage Works.
The Chief Executive of Property Master, Angus Stewart, stated that the fall in the rates was mainly due to increased competition in the market. In fact there has been an increase of 13% in the mortgage offers for buy to let according to recently published figures.
The marketplace is also now under tighter regulation and lenders are having to show a lot of innovation to remain competitive. But Stewart was also quick to point out that the Bank of England will inevitably change the interest rate soon. He urged buy to let investors to act fast if they are looking for refinancing or a new buy to let mortgage.
Property Master helping Buy to Let Property investors
The aim of Property Master was to dispense with the complex manual processes that mortgage brokers use to find the best deal for buy to let investors. Their service allows landlords to use a free search tool that provides buy to let mortgage quotes that are pre screened against the specific and changing criteria of each lender.
The service is popular among landlords and more than 25,000 have tried out the service to date. The results are usually positive and landlords have reported that they will save around £1,800 on average with a remortgage.