Between increases to stamp duty and changes in buy to let tax relief, many professional landlords have felt a squeeze in their finances over the last year. Many are carefully considering their figures to ensure profitability in the face of uncertainty. If you’re a landlord in this position, one way to mitigate this uncertainty is to secure a long-term fixed rate buy to let mortgage, which will enable you to budget effectively for the foreseeable future.
Now may also be the time to do it. Just last week, three of eight key policymakers from the Bank of England’s Monetary Policy Committee (MPC) voted to raise the interest rate—which indicates the MPC’s stance is changing, and we may see a hike in the base rate before the year is out. If this is true, borrowing will become more expensive, so now could be the time for landlords to lock in low rates.
In light of this, this week’s product of the week is a 5-year fixed rate of 3.68% which can be used for either purchasing a new buy to let or remortgaging an old one. This product is only available to landlords with three or more buy to lets, and can be used for properties owned either in a personal name or through a limited company.
This is an excellent rate, from a lender Enness has a fantastic working relationship with. However, this product also offers an unusual advantage. The downside of securing a fixed-rate mortgage is usually that you will face early repayment charges (ERCs) if you want to remortgage or sell your property before the end of the term.
In an uncertain political and economic climate, you may be wary of tying yourself into a 5-year fixed rate. This product offers no ERCs after the first 3 years, so if your situation changes over the next 3 years and you wish to sell your property, you will not be penalized.
- 5-year fixed rate
- No ERCs after 3 years
- 75% Loan To Value
If this sounds like a product which could be beneficial for you, please don’t hesitate to get in touch for a further discussion. The buy to let landscape has become increasingly challenging, but with the right broker, it can be navigated successfully.