BTL rates barely affected by the rise in the discount rate

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Despite the base rate hike in December from 0.1% to 0.25%, the average cost of fixed-rate rental mortgages barely budged, according to Property Master’s Buy-to-let Mortgage Tracker.

However, homeowners are warned that this is unlikely to continue if, as expected, the base rate rises again when the Bank first meets this year on February 3, Property Master said.

The Buy-to-Let Mortgage Tracker found that the average rate for a mortgage purchased for a typical loan was as low as 1.69%, which, after fees included, translates to a monthly cost of $ 262. £. It was a two-year, £ 160,000 fixed rate loan, representing 60% of the property’s value. The average Lease Purchase SVR was 4.77%, up slightly (by 0.03%) from cost before the Bank’s recent base rate hike, although a number of lenders have announced increases to their SVR from February 1.

Property Master said this means homeowners who currently stick to a standard variable rate pay around £ 596 per month, up to £ 334 more per month than if they switched to the average fixed rate mortgage the least expensive.

Angus Stewart, Managing Director of Property Master, said: “The purchase mortgage market is a dynamic market and, once again, we have seen how this competition has helped to some extent to protect homeowners. increase in costs that you would expect to see. a hike in the base bank rate, at least for fixed rate homeowners. The question is how much longer, as expectations rise, the bank will move again in the first week of February. This could very well be a small window for homeowners to get a good rate before the market moves more decisively in an environment of rising interest rates.

“What we can say with certainty is that the availability of low buy-to-rent mortgage rates has to a large extent masked the pressures on landlords operating in the private rental sector. The increasing cost of regulation, increasing taxes and removing various tax benefits had little impact while financial costs remained low. If that changes, it will hit homeowners hard, and we may well see at least the little ones deciding that buy-lease is no longer a wise investment for them.

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