020 7625 9007

Good news for landlords: Five-year buy-to-let mortgage rates hit record lows

Andrew Binstock
18.04.18

If you’re a landlord whose fixed-rate mortgage is coming to an end, or you are thinking about investing in the rental market with a buy-to-let mortgage, then you’ll be pleased to learn five-year buy-to-let (BTL) mortgages are back to record lows.

Data from Money Facts shows that the average five-year, fixed BTL mortgage rate has returned to the record low of 3.43%, last seen in October 2017. The fall in BTL fixed five-year rates has been linked with the changes made to stamp duty made in April 2016. Many landlords quickly purchased property before the stamp duty changes were made, which might have meant they had to pay an additional 3% on stamp duty for purchases made after April 2016.

As Money Facts notes, landlords who took out a two-year fixed BTL mortgage at the time will now be coming to the end of their term, meaning there’s plenty of business to be had for lenders, hence the rush to offer lower rates on five-year fixed terms.

Charlotte Nelson, finance expert at Money Facts, says lenders could be focusing on five-year fixed rates instead of two-year products due to “stress-testing” reasons.

“The stress test that is applied to two-year fixed rates does not apply to five-year deals,” Charlotte Nelson explains.

In November last year, it was reported that homeowners were rushing to fix their mortgage rates on five-year deals due to concerns that the Bank of England was to hike interest rates. In November, the Bank of England raised interest rates for the first time in a decade, from 0.25% to 0.5%.  Figures show that in October 2017 around 42% of homeowners re-mortgaging opted for five-year fixed rates, contrasting to just 9% of those previously re-mortgaging who opted for long-term deals.

As the price war on low-interest mortgages shows little signs of abating, amongst a climate of interest rates uncertainty, fixing buy-to-let mortgages for five years on low interest deals is undoubtedly attractive to landlords.

Latest articles

London’s private landlords earn £7bn from investments in the last year

From April 2017 to 2018, private landlords in the British capital earned a total of £7bn from their residential property investments,...

Demand for commercial property in Britain high among investors

Demand for commercial property in Britain continues to be robust, regardless of ongoing Brexit uncertainty This was the finding of a review...

House prices bounce back in October

House prices in England and Wales rose by 04% in October, leaving the average price of a property at £304,433This was the finding of...

Current auction

Sign up for our newsletter

Back to Blog

REQUEST A FREE AUCTION VALUATION

Click here

Next Auction

12pm on the 12th February 2019

London Marriott Hotel Regents Park, 128 King Henry's Rd, London NW3 3ST

AHL PRIVATE TREATY SALES

WHY NOT TALK TO US ABOUT AVAILABLE, NOT FOR AUCTION INVESTMENTS AND DEVELOPMENTS

Click here

Contact us

Use the form below to get in touch