The flat fees for buy to let mortgages are now lower than they have been at any point in the past 12 months, according to specialist broker Mortgages for Business.
The average flat fee among buy to let mortgage products fell by more than five per cent in the second quarter of this year, down to £1,370 from £1,446 in Q1. Mortgages for Business says this means an average saving of £76 in fees on every mortgage they take.
However, percentage based fees are becoming increasingly common with lenders trying to keep interest rates low while still allowing profits to scale with larger loans.
Mortgages for Business says percentage based fees now apply to 48 per cent of buy to let mortgage products, having overtaken flat fees on product availability at the start of the year. These products have increased in number in every quarter since Q2 2016.
Just 11 per cent of buy to let mortgage products carried no arrangement fees in Q2, down from 15 per cent in Q1.
“With interest rates still at exceptional lows, it’s all the more important to make sure you look at any additional charges when taking a buy to let mortgage. It is therefore promising to see a reduction in the average flat fee charged for mortgage products” suggests the broker’s chief operating officer, Steve Olejnik.