Landlords Set to Enjoy Record Lows for Five Year Fixed Rate Mortgages

After several months filled with bad news for beleaguered landlords, it is refreshing to finally have something more positive to report. Moneyfacts has explored the data from the buy-to-let mortgage market and revealed the average rate for a five-year fixed BTL mortgage is now at 3.43%. That may not mean much on the surface, but it indicates the average rate for this mortgage type is now back to the record low level it reached last October. According to their data, the current average is slightly lower than it was this past January. At that point, the average for a five-year BTL fixed deal was 3.45%. Compare these figures to the average of 3.77% seen last March, and you can see how significant the change is. Great news for landlords “I’m sure many landlords will appreciate this bit of good news,” said Darren Pescod, CEO of The Mortgage Broker Limited. “Lots of landlords locked themselves into a two-year fixed-rate deal two years ago, just prior to the stamp duty increase. These deals will now be coming to an end, so plenty of landlords will now be shopping around for another competitive deal. “Many experts believe this is why interest rates on five-year fixed-rate deals have dropped. Banks and building societies have realised there are plenty of landlords who need another good deal. Dropping the rates will provide more competition in the market, and that can only be a good thing for landlords.” The average figure means there are better rates to be had too While the average BTL deal for a five-year fixed-rate mortgage has dropped, many astute landlords will realise there are cheaper rates around as well. By shopping around, there is every chance those looking for another good deal will be rewarded for their hard work. Are there other reasons why these five-year deals are so competitive? With so much uncertainty and change surrounding the buy-to-let market in recent years, it is no surprise landlords want to try and lock in the best deal they possibly can. Some stability and familiarity in a sea of change is always a good thing. Some have also pointed out that the stress test landlords must undergo if they want a two-year deal isn’t applicable to five-year deals. So, not only is there a chance to get a competitive deal, there is also a chance it could be easier to obtain. This is yet another reason why lenders are keen to provide a good range of competitive fixed-rate deals lasting for five years. No one knows what else might happen in this marketplace in the coming months and years, least of all landlords. “Any landlords looking to lock in a new fixed-rate deal in the coming weeks or months would do well to look at these low rates,” Darren Pescod added. “There is every chance they will look back and be glad they did, especially with an impending interest rate rise on the horizon once more.”

Published on 8 March 2018

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