Good news for landlords as cheaper buy-to-let mortgage deals become available

by Jason McClean

16:13 PM, 23rd April 2015
About 4 years ago

Good news for landlords as cheaper buy-to-let mortgage deals become available

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Good news for landlords as cheaper buy-to-let mortgage deals become available

The number of buy-to-let (BTL) mortgages available on the market is on the rise, with cheaper rates also becoming available to landlords.good

In recent years, there has been a healthy rise in the number of BTL mortgages on offer, up from 476 two years ago to 745 today, the figures show.

Also noted in the study is the sharp increase in the number of low rate deals available, and the fall in rates across the board.

There are currently 83 two-year fixed BTL deals prices below 3%, up from just five two years ago.

Two years ago there were just 37 BTL mortgages priced below 5%, today there are 143 on the market, offering landlords greater choice and pleasing their pocket.

“It is great news for landlords that not only are buy-to-let mortgages becoming more widely available, but they are also becoming cheaper,” says a spokesperson for Landlord Insurance providers Discount Insurance.

The average two-year fixed rate BTL deal is currently priced at 3.45% (down from 4.44% two years ago), and the average five-year deal now stands at 4.25% (down from 4.67%).

“Lower rates will help landlords increase their margins without having to increase their rents. With what where once specialist products now widely available, it is little wonder that many approaching retirement are considering buy-to-let to boost their pension fund” added the spokesperson.

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Comments

Neil Patterson

16:16 PM, 23rd April 2015
About 4 years ago

Hi Jason,

I can indeed so the increase in the number of cheaper deals and higher Loan to Values when I am updating the Buy to Let Quote engine please see >> http://www.property118.com/buy-to-let-mortgage-calculator-2/

Howard Reuben CeMap CeRER

8:10 AM, 24th April 2015
About 4 years ago

"There are currently 83 two-year fixed BTL deals prices below 3%, up from just five two years ago.

Two years ago there were just 37 BTL mortgages priced below 5%, today there are 143 on the market, offering landlords greater choice and pleasing their pocket."

And this is where the problems start .......

As an Adviser for over 22 years, I have seen the 'boom times' huge market proposition, the decimated 'financial crisis' mortgage market and we're currently living in sunnier recovering market conditions now....... except ....

The banks had their fingers burned. No matter whether the market offers 83 or 830 fixed rate mortgage products, eligibility is tighter now than ever before (for every type of mortgage, ie resi, BTL, fixed, tracker etc etc).

Yesterday I had to emphasise a point to someone who was about to put a (significant) deposit down on a property purchase because he had looked online, seen some mortgage calculations and - in his mind - it was affordable, therefore he can have it.

The fact that he has other mortgage commitments, a decreasing net profit etc., was not considered. But the lenders do consider things like that.

Just because a (say) £30k salary x 4 = "affordable", does not mean that the lender will agree. Lenders nowadays use their own affordability calculator models, and £30k MINUS 'value of dependents' MINUS loans, credit cards, hp, finance, other mortgages, maintenance payments, lifestyle bills ETC., means that not even a BTL investor should rush in and buy and spend money on valuation fees, booking fees etc without having a professional Broker carry out a 'protective' due diligence process first.

By securing a formal Agreement via a Broker, the borrower can be reassured that the best range of deals has been researched (including the range of mortgages only available via specialist lenders, or the exclusive deals we have access to as well) that are NOT on the comparethefurryanimal websites.

So, the 83 fixed rate deals may be available as a starting point, but is the potential borrower eligible for all, some or none?

As we go deeper in to this sunnier season and more properties come on to the market, borrowers need to be quick to secure the best property deals. And that means being 'good for the money'. And the best way of doing that?

Contact a professional mortgage Broker who has access to the widest range of 'high street', specialist lender and exclusive mortgage deals and secure a Mortgage Certificate.

Howard
http://www.property118.com/member/?id=314

ps - and speak to Jason for your insurance needs too! 🙂

Hugh Jass

11:26 AM, 24th April 2015
About 4 years ago

Howard- agreed affordability and criteria is tighter than ever before... Even when you meet the criteria, only after application do the scrutinize the application...Aldermore are about the worst IMO, just a waste of time.....personally take the time to find banks and BS that don't deal with brokers and deal with them direct- it pays off !

Jireh Homes

12:42 PM, 24th April 2015
About 4 years ago

Acknowledge there is a significant increase in the number of BTL Loans now available and can concur the amount of information now sought in support of application and the length of time to obtain a formal offer is also far greater. However would be interested to learn from the experts in this field how many of the products now have large fees attached, which are generally never quoted with the "low" interest rates. Suspect many are caught out by what on first selection appears a "good deal".

Allan

Howard Reuben CeMap CeRER

12:52 PM, 24th April 2015
About 4 years ago

That's a really good point although working with a professional broker (rather than buying 'online' or from a salesman in a bank) and you'll get the research in 'total to pay' order which provides an overview of the value of the deal with all interest rates, payments, fees and costs included over either special offer term or full term. It's all about having the right Broker methinks.

Neil Patterson

13:04 PM, 24th April 2015
About 4 years ago

Reply to the comment left by "Hugh Jass" at "24/04/2015 - 11:26":

Many specialist BTL lenders are not High Street and some refuse to deal with the public directly eg. BMS, Shawbrook etc.

There are also lenders that offer exclusive products only to their best brokers/net works that an individual cannot gain access to.

Aldermore are one of the few BTL lenders that offer 80% LTV and while in individual circumstances you can have issues with any lender some applications will go more smoothly dependent on criteria and document proof.

Property Saviour

14:49 PM, 25th April 2015
About 4 years ago

Rather than borrowing up to the eye balls, I am currently reducing the debt gearing down to 60% LTV. Not only it gives you great rates you also benefit from healthy monthly return.

Jason McClean

10:47 AM, 27th April 2015
About 4 years ago

Good approach Property Saviour. It's not often you get people advocating borrow less, but it is a life changer when you do...


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