The independent mortgage market monitor Moneyfacts says some buy to let mortgage rates have gone back to record lows.
The monitor says that many buy to let investors will have taken out two year fixed rate deals in spring 2016 as they purchased properties to let ahead of the three per cent stamp duty surcharge introduced in April that year.
Now, as they may be seeking to remortgage, Moneyfacts has analysed the market and concluded that the average five year fixed rate has fallen to 3.43 per cent – equalling its lowest-ever rate.
“Many borrowers rushed to make purchases in the first few months of 2016, to beat the stamp duty hike. In fact, March 2016 recorded a sharp increase in the purchase of buy-to-let homes. Because of this, a substantial chunk of borrowers are likely to be remortgaging in the coming months” says Moneyfacts’ finance expert Charlotte Nelson.
“In anticipation of this, lenders have started to compete in the five year fixed rate market to vie for these potential borrowers’ custom. Five year fixed rates are likely to be a popular choice among landlords, as the stress-test that is applied for two year fixed rates does not apply to the five year deals. This could well be one of the reasons why BTL lenders have focused competition within this market” she adds.
Nelson believes the price war at the lowest end of the mortgage market shows no signs of abating yet, either. The sub-two per cent five year fixed rate barrier has been breached for the first time on record, by The Mortgage Works.