The autumn's Prudential Regulation Authority changes, coupled with months of rate rise predictions, seem to have had little effect on the cost of buy to let mortgages.
Despite going through another period of change and uncertainty, leading to this month’s eventual hike in interest rates, a number of mainstream BTL mortgages are down in cost since August – some for the second successive quarter, according to Mortgage Brain.
With a current rate of 1.54 per cent and 1.89 per cent respectively, the cost of a 60 per cent and 70 per cent Loan To Value two year buy to let tracker, for example, is now two per cent lower than it was three months ago.
By comparison, the cost of a two year fixed BTL mortgage with a 60 per cent LTV (at 2.08 per cent) is now one per cent lower than it was at the beginning of August, while its 70 per cent and 80 per cent LTV counterparts remain stable with no movement in cost being recorded over the same period.
A similar trend can be seen in the cost of longer term products with Mortgage Brain’s latest data showing a two per cent drop in the cost of a 70 per cent LTV three and five year fixed BTL mortgage, while the cost of a 60 per cent LTV three and five year fixed, and an 80 per cent LTV three year fixed, all remain unchanged when compared to August 2017.
“With interest rates rising for the first time in just over 10 years, and further increases predicted, this could be one of the last times that our analysis reports reductions in the cost of mainstream BTL mortgages" Mark Lofthouse, CEO of Mortgage Brain, comments.
“While our three, six and 12 month analysis all show potential cost savings for BTL investors, we’re already starting to see ripples across the market following this month’s rate rise. Our most recent monthly data, for example, shows signs of a number of cost increases when compared to last month and it will be interesting to see how this develops in the coming months.”