The Average Buy-to-Let Mortgage Rate Continues to Fall

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While buy-to-let mortgages remain expensive, rates have recently fallen to almost their lowest level since they first began to rise. The average rate from the 1st of June, is 5.55%, which is only a slight decrease from May’s 5.60%. However, at their peak, average rates for buy-to-let mortgages reached 6.79% in August 2023. The fall in rates has been consistent although the Bank of England base rate has been held at 5.25% since August 2023.

The expectation is that the base rate will start to decrease in the coming months. This will encourage more lenders to offer more competitive products and cheaper buy-to-let mortgages.

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Buy-to-Let Mortgages

There has been a good level of growth in the number of landlord mortgage deals on the market, as both high street and specialist lenders have upped their offerings. However, Landlords should consider more than just the rates when it comes to a BTL mortgage. Some products come with other benefits, such as legal fees included for free.

It is also important to look into what fees are being charged on the products included, as these can sometimes outweigh the savings of lower rates, so it is no better overall. However, for some landlords, the secure lower monthly payment may be attractive enough not to mind the higher fees.

Additionally, the current uncertainty within the current political situation may affect the property markets. Meaning people are not expecting any major changes in the lending space for the next few months. However, the fact that UK inflation is closer to its 2% target is likely to boost market confidence from both investors and renters, raising the demand for rental properties.

There is a rising rental demand across the UK due to rising population, generation rent, property prices, and regeneration. Due to the demand rising, rental prices are also rising which means yields for investors will be increasing. As the mortgage rates are lowering and yields are rising investors returns are sure to increase.

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Mortgage Offers

Already in June, some lenders are offering new product ranges and exclusive offers in their buy-to-let mortgages, which is good news for landlords wanting a BTL mortgage. As a result, there is expected to be a boost in interest in the buy-to-let space among mortgaged buyers.

Buy to Let by Foundation is a specialist lender that has recently launched a new offer for landlords seeking buy-to-let mortgages. They launched a new limited-time offer of a five-year fixed-rate product within the F1 tier. Catering to clients with an almost clean credit history. The new deal is available up to 75% loan to value (LTV) at a rate of 5.74%, with a 1.75% fee. They have said it is available to individuals, experienced and first-time landlords, for both purchasing and remortgaging a property.