Landlords on standard variable BTL (buy-to-let) rates are paying typically £27 more per month for their mortgages than at the start of the year, according to research from online mortgage broker, Property Master, the digital start up that uses algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market. Switching to a fixed rate mortgage could save them between £218 and £352 per month.
According to Property Master’s Mortgage Tracker research the monthly cost of an average BTL Standard Variable Mortgage rate for a typical sum of £150,000 rose from £620 in September to £629 in October. This follows the increase in the bank base rate in August when rates rose above 0.5% for the first time in a decade. The year on year rise is £27 – from £602 in January to £629 now.
Whilst some fixed rate mortgage rates have crept up since the start of the year others have fallen meaning there are good deals out there to be had by landlords looking to refinance.
The Property Master Mortgage Tracker tracks a range of buy-to-let mortgages for an interest only loan of £150,000. The rates and costs recorded include product and application fees. Deals from 18 of some of the biggest lenders in the buy-to-let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise were tracked.
Angus Stewart, Property Master’s Chief Executive, commented: “Obviously the increase in bank base rates has affected Standard Variable Rates the most but it does appear the situation is more mixed amongst fixed rate loans. Whilst some have crept up others such as the more popular fixed rate five-year loans have fallen back slightly since last month.”
He continued: “Landlords look to be benefiting from a surge in competition amongst lenders particularly as those lenders fear that a raft of recent Government measures will reduce the size of the private rented sector. Remortgaging figures look very healthy but the number of new mortgages taken out by landlords is falling. The good news is there are over 1,000 fixed rate mortgages alone on offer currently for landlords so shopping around is essential.”
Property Master was launched almost 18 months ago and aims to shake up the buy-to-let mortgage market currently served by around 12,000 mortgage brokers. It has already attracted financial backing from a broad range of private investors including a minority stake being taken by LSL Property Services, whose estate and letting agency brands include Your Move and Reeds Rains.
Property Master has automated what was a manual, complex process to provide landlords with a free easy to use mortgage search tool which provides a mortgage quote that is pre-screened against each lender’s specific and changing criteria. Over 25,000 landlords have already tried the Property Master service and a typical remortgage saving is around £1,800.