In April, for the first time this year, mortgage rates on Buy to Let property rose, increasing the cost of borrowing for property investors. Residential mortgages continue to fall, so are lenders putting yet another spanner in the works to deter property investors from making further investments? Or could it be that rates have just hit rock bottom for this part of the market?
This does not constitute advice and advice should be sought in all instances before acting on it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Rise in Buy to Let lending
Last month, Buy to Let borrowers would have seen an increase in the cost of the two, three and five year fixed-rate loans.
Mortgage for Business suggests rates moved as follows:
- 2 year – From 2.86 in March, to 2.90 in April
- 3 year – From 3.53 in March to 3.56 in April
- 5 year – From 3.74 in March to 3.76 in April
It was the first time that a 3-year fixed rate deal had risen in a year, since April 2016.
Tracker mortgages did fall to 4.74 percent in April, down from 4.85 percent in March.
A good deal so far
One argument could be that lenders are counter-balancing their continued cuts to residential mortgages by increasing those rates in the Buy to Let sector.
However, rates across the board, including Buy to Let have been falling for some time now.
This has been to maintain a higher volume of applications, and make available options for a market sector that was already under fire from the mortgage regulator, as well as HMRC.
Economically, rates are only able to fall so low before the limit is reached. Another argument therefore is that Buy to Let mortgages have simply reached their lower limit, and in fact now they just need to start to steadily increase again.
Looking to buy an investment property?
If you are considering buying your first investment property for rental purposes, or extending an existing portfolio, speak with a mortgage adviser about your options.
There is no crystal ball to predict rates in the future, they may fall again in a few months.
However, when rates start to rise it is usually a sign of change, so get it onto your radar and keep an eye on trends over the coming months, before you miss out on low-cost options.
Discuss your Buy to Let mortgage options with Chris
If you are considering buying an investment property this year, or expanding your existing portfolio, discuss your options with Chris.
Tel: 01403 780 770
Follow us on Twitter and LinkedIn for regular financial and mortgage updates
?