Landlords opting for fixed rate deals when remortgaging

Landlords opting for fixed rate deals when remortgaging

0:04 AM, 1st March 2023, About A year ago

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More than 75% of landlords expect to opt for a fixed rate deal when it is time for them to remortgage, a survey reveals.

The lender Landbay has revealed that five-year fixed rates are still the most popular option for landlords.

More than half (46%) preferred five-year fixed rates, however this has fallen from 68% in August.

Landlords’ views of remortgaging options have changed since the mini-budget

Shorter-term fixes have grown in popularity with almost a quarter (24%) of landlords eyeing up two- or three-year fixed rate terms, compared to 13% in the previous survey.

Paul Brett, the managing director of intermediaries at Landbay, said: “When we talk about this record year of mortgage maturity, much of the conversation is focused on first-time buyers or traditional households.

“It’s important we remember the many landlords who are set to remortgage too, and judging by our latest data, fixes still look like the preferred product.”

He added: “It’s interesting to see how landlords’ views of their remortgaging options have changed since September’s mini-Budget. Fewer landlords are considering five-year fixed rates, and more are looking at two-year fixes.”

‘Considerable rise in landlords thinking of taking a tracker mortgage’

Almost one in six (17%) of respondents in the survey said they would consider a variable tracker rate, while 6% might revert to standard variable rate (SVR).

In Landbay’s previous survey last August, a month before the mini-Budget, no one said they would opt for a tracker.

The lender suggests that the rise in landlords considering trackers is due to economic uncertainty. Some respondents believe rates will come down in the next year or two so don’t want to commit to a long-term product just now.

Mr Brett continued: “There was a considerable rise in landlords thinking of taking a tracker mortgage, up from zero to 17%.

“A tracker mortgage is a safer option for some who don’t want to commit to a fixed rate.

“The advantage with trackers is there are no early repayment charges so borrowers can move to a fixed product if rates come down later in the year.”


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