It’s been a challenging few months for landlords with a buy to let mortgage, with Prudential Regulation Authority (PRA) changes to stress testing calculations, and the phasing out of tax relief for buy to let mortgages.
But there’s finally some good news—a new report has revealed that potential landlords could benefit from a drop in the cost of buy to let mortgages.
Mortgage Brain have published new data which shows how the cost of a buy to let mortgage have decreased over the last year. Their research reveals the cost of a two-year fixed buy to let mortgage is now 4% lower than in May 2017, based on a loan to value (LTV) of 60% or 70%. Meanwhile, the cost of a 70% LTV two-year tracker is now 2% lower than it was three months previously.
And this trend is consistent across a range of products. In our experience, many landlords are looking for longer term fixed rates, to give them security in what their mortgage payments will be. For a 5-year fixed at 80% LTV, the cost has decreased by 2.97% from 3 months previously. This is excellent news for landlords who have felt the squeeze over the last year.
What next for the buy to let mortgage market
However, more changes are afoot in September, which will apply if you are a portfolio landlord. In September, the PRA will reassess what they consider to be a portfolio landlord. Landlords with more than four mortgaged buy to let properties will experience a change in the way a portfolio landlord mortgage is underwritten.
Fortunately, we have access to the entire lender market, which enables us to secure the best rates for our clients. If you are a buy to let landlord looking to purchase a new property or remortgage an old one, we are confident we will be able to help you arrange the cheapest possible mortgage for your circumstances, so please do get in touch.