Leeds Building Society is the latest lender to announce reductions to its BTL mortgage products following the Bank of England’s decision to cut the base rate from 5.25% to 5%.
Although SWAP rates have been creeping down since mid-May, in the last two weeks the major buy-to-let lenders have reduced rates by up to 50 basis points, including big players such as TMW, TML, Precise Mortgages and Landbay, providing landlords with more choice.
According to MFB, 75% LTV two and five-year fixed rates for individuals now start from 3.59% and 3.84% (with a reasonable 3% arrangement fee) while rates for limited companies start from 4.79% and 4.99% (with a 3% arrangement fee). Lower interest rates are available if investors are willing to pay a higher (5-7%) arrangement fee.
“Reductions are still modest, but rather than most rates starting with a 6 as we had a year ago, seeing more in the 3-4% range is really encouraging,” says MD Gavin Richardson (pictured).
“SWAP rates still indicate that interest rates will continue to decrease slowly over the remainder of the year. Although these reductions will be small, they will significantly impact how much you spend over the life of a mortgage.
“And with house prices only just starting to increase, now is a great time to consider new investments.”
However, Lee Grandin at Landlord Mortgages sounds a note of caution for investors as he says the fight against inflation is far from over.
“Confidence cannot be found in economic factors but more how you can leverage the turmoil in the money markets to buy at under market value,” Grandin tells LandlordZONE.
“A bargain is a bargain in any market – you just need to know what a bargain is in the first place and that is the key to any investment whether stocks and shares or property.”
