Low mortgage rates promote buy to let option


Recent mortgage rate changes implemented by lenders has helped more buy-to-let loans being available, and at more competitive rates than before.

The ‘rate war’ between lenders, which has seen companies such as Barclays and First Direct offer a ten year, fixed-rate loan for less than 3 per cent, has prompted lenders to significantly reduce their own buy-to-let rates. They have also tried to make their lending terms more relaxed, all in an attempt to attract more customers.

A two-year landlord loan is available at a rate of approximately 3.5 per cent, if you are able to find one of the better deals available. This is significantly less than it was just six months previously, and comes as a result of stable/rising rent rates and lower mortgage rates, which enable landlords to make more profits.

Over 800 buy-to-let loans are currently available, having seen an increase of more than 100 in the last three months alone.

When borrowing, if you have a larger deposit, you will generally be in a better position than others, but costs are decreasing. Loans for relatively small deposits are easier to gain now too.

A spokesman for SPF Private Clients, a broker, said: “With lenders aggressively competing for business, there are more buy-to-let mortgages available with increasingly relaxed criteria and lower rates – all providing a further boost to an already popular sector.”

“While it is easier to get into buy-to-let now than it was five years ago, it is still harder than it was before the downturn. Lenders have learnt their lesson and are being more cautious.”

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