Buy-to-let (BTL) mortgage costs have continued to fall since the second quarter of 2019, according to Mortgage Brain analysis.

The cost of a 60% loan-to-value (LTV) two-year fixed buy-to-let mortgage is now 1.9% lower than it was three months ago, equivalent to an annual saving of £144 on a £150,000 mortgage.

During the same period, the cost of a 70% LTV three-year fixed BTL mortgage has dropped by 1.1%. This equates to a yearly saving of £90 for borrowers with a £150,000 mortgage.

Investors looking to fix their BTL deals for longer can also benefit from some significant savings. An 80% LTV five-year fixed BTL mortgage now costs 3.5% lower than 12 months ago, representing an annual saving of £324 for borrowers.

Mortgage Brain says that the sheer number of products now on the market is driving down costs, with 3,859 BTL products available from mainstream lenders – a rise of 11% compared to a year ago.

The analysis reveals, however, that on average the cost of a buy-to-let mortgage is still higher than a mainstream residential product. It gives the example of an 80% LTV five-year fixed product costing over 16% more for buy-to-let investors.

The difference in costs for mainstream residential and buy-to-let purchasers of tracker mortgages is less, though, closer to 5% for a 70% LTV two-year product.

“Overall the message for the BTL market is positive; especially for investors looking to fix for a longer term,” says Mark Lofthouse, chief executive of Mortgage Brain.

“The cost of BTL mortgages continue to reach historic lows, with the market remaining competitive given the number of BTL mortgages currently on the market.” 

Lofthouse says, however, that the market is ‘clouded’ by a combination of political uncertainty, the looming Brexit deadline and a weakening economic forecast.

“The need therefore for specialist advice from a broker is more important than ever, so landlords are confident they are getting a mortgage that best suits their needs,” he says.