The most recent data released from Mortgages for Business shows that flat fees for buy-to-let mortgages have dropped to a new low.
These fees fell by over 5% in the second quarter of 2017, from £1,446 to £1,370.
Fees
However, percentage based fees are now becoming more common with lenders. This is a good way of keeping interest rates low, while still letting profits to scale with larger loans.
Percentage-based fees now apply to 48% of the total number of buy-to-let mortgage products, having now overtaken flat fees in terms of product availability since the start of 2017.
In fact, these products have risen in number in every quarter since Q2 2016.
With percentage-based fees becoming more common, the market has seen a reduction in the availability of fee-free options. Now, just 11% of buy-to-let mortgage products have no arranged fees – a fall from 15% in the opening quarter of the year.
Flat fee mortgages for buy-to-let at record lows
Exceptional Lows
Steve Olejnik, COO of Mortgages for Business, observed: ‘With interest rates still at exceptional lows, it’s all the more important to make sure you look at any additional charges when taking a buy-to-let mortgage. It is therefore promising to see a reduction in the average flat fee charged for mortgage products.’[1]
[1] http://www.propertyreporter.co.uk/landlords/btl-flat-fees-at-new-record-low.html