BTL mortgage payments rocket by 286% in one year

BTL mortgage payments rocket by 286% in one year

0:03 AM, 7th December 2022, About A year ago 4

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Buy-to-let landlords are not only facing a tougher time securing finance with fewer mortgages and rising rates, but interest-only BTL mortgages have rocketed by 286.4%.

That’s according to specialist property lending experts, Octane Capital, who have analysed the mortgage market for landlords and how this impacts tenants.

The firm points out that news coverage of mortgage rates increasing has centred on the strife facing homeowners and families, not buy-to-let landlords – and why rents are rising for many tenants.

The analysis shows that the number of BTL mortgage products available has fallen by -51.1% in the past year, down from 3,264 in November 2021, to 1,595 in November 2022.

Average rate being offered increasing by 2.1%

On top of that, landlords are also seeing the average rate being offered increasing by 2.1% in the past year to sit at an average of 3.09% today.

As a result, the average monthly repayment for landlords has climbed from £656 to £917; an increase of 39.7%.

With interest-only mortgages, the average monthly payment has increased by a remarkable 242.8% to a high of £493 per month.

And when five-year fixed mortgages are analysed, rates have climbed from 1.39% to 4.89%.

This means the average monthly full payment has increased by 60.9%, while interest-only payments are up 286.4%.

‘Reduction in product choice for buy-to-let mortgages’

Jonathan Samuels, the CEO of Octane Capital, said: “The reduction in product choice for buy-to-let mortgages has been influenced largely by a consistent string of Bank of England interest rate hikes which has led to many lenders pulling their buy-to-let range.

“However, with stability gradually returning to the market, we fully expect 2023 to bring with it a far more settled market for landlords and buy-to-let investors.

“We have already set plans into motion with a view of increasing our buy-to-let offering in the new year and as a greater level of choice returns, the nation’s landlords will be able to better negotiate the landscape when borrowing.”

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19:38 PM, 7th December 2022, About A year ago

What is irritating for I upgrading properties to new EPC requirements and won't therfore be afford to update my own home where I would be able to rationalise my own energy bills.

I'm off grid so.was.looking at alternatives to oil boiler but this will now go on the back-burner?

Dennis Forrest

22:43 PM, 7th December 2022, About A year ago

Reply to the comment left by David Hudson at 07/12/2022 - 19:38
go for LPG instead. Oil boilers do not modulate - they are either on full or they are off, so correct boiler sizing is absolutely essential. To low an output and it will never heat your property - too high and it will spend most of its time switching on an off. No problem with a gas boiler - if it is slightly oversized (recommended) it will just turn itself down. Regarding your kitchen you can also have a gas hob - they don't do an oil hob.

Old Mrs Landlord

10:35 AM, 8th December 2022, About A year ago

Reply to the comment left by Dennis Forrest at 07/12/2022 - 22:43
Oil-fired Agas, Rayburns, etc. have hobs.

Dennis Forrest

14:50 PM, 8th December 2022, About A year ago

Reply to the comment left by Old Mrs Landlord at 08/12/2022 - 10:35
Unless they have changed them aren't AGA's on all the time. Can you switch them off and on instantly like a gas hob?

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