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Buy-to-let mortgage costs are on the rise

The cost of most mainstream buy-to-let (BTL) mortgages is starting to climb following political uncertainty and last November’s interest rate rises, according to Mortgage Brain.

The company looked at the number of cost increases over the past three months and found that a two-year BTL tracker with a 60% and 70% LTV is now 3% higher than it was in November 2017 – equal to an annualised increase of £216 on a £150,000 mortgage.

Meanwhile, the cost of an 80% LTV two-year fixed (at 3.44%) is now 2% higher than it was three months ago; its 60% and 70% LTV counterparts, and a 70% LTV three-year fixed, all 1% higher than they were at the beginning of November 2017.


Mark Lofthouse, chief executive officer of Mortgage Brain, said: “It looks like the Prudential Regulation Authority changes, coupled with what could be seen as the start of a number of interest rate rises, is starting to affect the cost of mainstream BTL mortgages.”

“Buy-to-let product members are at a new high, however, and there are still pockets of cost reductions and savings to be had for potential landlords and property investors.”

Mortgage Brain’s data showed a 2% reduction in cost over the past three months for a 70% LTV five-year fixed and a 1% cost reduction for the same product with a 60% and 80% LTV – good news for borrowers looking for a longer-term deal.

Despite the fluctuations in costs and rates, an additional 721 products were introduced into the UK BTL market during 2017, with the sector seeing the strongest performance in product numbers over the past year.

This also meant a 32% increase in overall product availability – up from 2,238 in January 2017 to 2,959 in January 2018.

Lofthouse added: “With the BTL market set to become even more complex in 2018, we might be on the start of a new path in terms of mortgage cost movement compared to the past few years.”

  • Gene Lewis

    Not sure how much impact "political uncertainty" has on this and there is no certainty that there will be a succession of interest rate hikes. Many of our overseas clients see the U.K as very stable politically.


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