The latest Mortgage Tracker from online broker Property
Master, for February 2019, presents a mixed picture on the outlook for
buy-to-let mortgage rates.
As the Bank of England (BoE) prepares for its first Monetary
Policy Committee (MPC) meeting on interest rates of 2019 on Thursday (7th
February 2019), the latest report shows that the costs of three out of six
categories of fixed buy-to-let mortgage rates have increased compared to last
month, but the remaining three categories have fallen in cost.
Five-year fixed rate mortgages, which have been steadily
gaining in popularity among buy-to-let landlords, remain the best value for
investors, with declines in costs year-on-year of up to £24 per month.
Property Master’s February 2019 Mortgage Tracker shows that
a five-year fixed rate mortgage for 65% and 75% of the value of a property are
all down annually. Savings for each of these mortgages, respectively, were £24
and £15 a month.
The cost of most two-year fixed rates was up year-on-year,
with the cost of a two-year fix for 50% of the property’s value up by as much
as £40 per month.
Property Master’s Mortgage Tracker follows a range of
buy-to-let mortgages for an interest-only loan of £150,000. Deals from 18 of
some of the largest lenders in the buy-to-let market (including Barclays, BM
Solutions, RBS, The Mortgage Works, Godiva, and Precise) were tracked.
Figures for this month’s report were calculated on deals
available on 1st February 2019.
Angus Stewart, the Chief Executive of Property Master, says:
“Brexit continues to cloud the outlook for
interest rates, but many commentators are pencilling in a move upwards in May. The
situation is more confusing still for landlords, given that it is the start of
the year and there is a flurry of new deals out from lenders – some better than
around need also to remember some lenders set higher interest cover ratios,
requiring rents to cover at least 145% of their mortgage payments. Others
are wary of lending to landlords with more than three properties. Then there is
the need to factor in product fees, which our research shows can average
between £658 and £1,212.”