The cost of buy-to-let mortgages has remained mostly unaffected by the second phase of Prudential Regulation Authority changes, coupled with months of rate rise predictions, according to new data from Mortgage Brain.
In spite of another period of change and uncertainty, which led to the recent and long-awaited rise in interest rates, a number of mainstream buy-to-let mortgages have reduced in cost since August – with some falling for the second consecutive quarter.
The price of a 60% and 70% LTV two year BTL Tracker, for instance, is now 2% lower than it was three months ago, with a current rate (as of November 1) of 1.54% and 1.89% respectively.
Meanwhile, the cost of a two-year fixed-rate BTL mortgage with a 60% LTV (at a rate of 2.08%) is currently 1% lower than it was at the start of August. The fixed two year at 70% and 80% LTV have remained steady, with no movement in cost in the last three months.
It’s a similar story with the cost of longer-term products, with Mortgage Brain’s latest findings highlighting a 2% fall in the cost a 70% LTV three and five year fixed BTL mortgage. Elsewhere, the cost of a 60% LTV three and five year fixed deal, and an 80% LTV three year fixed, remain unchanged from August 2017.
The only product that now costs more is a five-year fixed BTL mortgage, which currently has a rate of 4.09% and is now 2% more expensive than it was three months ago and costs 1% more than it did at the start of October.
“With interest rates rising for the first time in just over 10 years, and further increases predicted, this could be one of the last times that our analysis reports reductions in the cost of mainstream BTL mortgages,” Mark Lofthouse, chief executive of Mortgage Brain, said.
“While our three, six and 12 month analysis all show potential cost savings for BTL investors, we’re already starting to see ripples across the market following this month’s rate rise. Our most recent monthly data, for example, shows signs of a number of cost increases when compared to last month and it will be interesting to see how this develops in the coming months.”