Landlords can now get a Buy-to-Let mortgage with interest rates below 1%!
Finally, landlords are going to be able to enjoy the lower rates all homeowners have been taking advantage of.
There are two lenders that have decided to lower their interest rates. These are Mortgage Works’ and Nationwide’s buy-to-let arm, it is thought to be the lowest ever rate on a buy-to-let mortgage. Finally, landlords are going to be able to enjoy the lower rates all homeowners have been taking advantage of.
These rates are only available to landlords with a deposit of at least 35% and have a two-year fixed rate.
The main cost is the additional fee which is equivalent to 2% of the loan amount. For example, a £150,000 home would have an extra fee of £1,950, this is before the valuation fees.
Prior to this the lowest rate for a buy-to-let mortgage was 1.16% with Barclays.
Almost matching The Mortgage Work's offer is Platform, the landlord arm of the Co-operative Bank, which has launched a buy-to-let mortgage with a 1% rate.
The two-year fixed deal is available to those with deposits of at least 40% and comes with a fee of £2,450.
Known as the 'premier' buy-to-let mortgage, it is only available on property purchases between £350,001 and £500,000, and the landlord must have a household income of at least £60,000.
They can also only have a maximum of three buy-to-let properties.
Both The Mortgage Works and Platform's products are available for both purchase and remortgage.
Mortgage rates have been dropping for multiple reasons.
The recent housing boom has led to increased competition among lenders, they want to attract low-risk business from those with high deposits to balance out riskier 90 and 95 per cent deals they are offering.
Banks have also had an increase in money they can lend, after the amount people were saving dramatically increased with them when the UK was under lockdown.
And the Bank of England's interest rate remains at 0.1 per cent, meaning that banks themselves can borrow money very cheaply and pass the saving on to their customers.
Landlords looking for new mortgage deals may do well to hold out and see what else is on offer, as brokers predict more buy-to-let rate cuts coming down the line.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: 'It was only a matter of time before the sub-1% mortgage price war spilled over into buy-to-let but with lenders awash with cash and keen to lend, it is the logical next step.
'Other lenders are likely to follow suit. There is a lot of appetite to lend and competing on rate or criteria are the main ways in which lenders can attract business.'