Buy-to-let mortgage rates rise
In August the Bank of England increased its base interest rate by 0.25%. This rate rise has led to buy-to-let mortgage rate increases, but these are not significant as yet.
In August 2018, most standard buy-to-let mortgages rates rose but rises were not large. For example, a landlord paying £603 a month for their mortgage on a £150,000 loan would now pay £620 a month.
Mortgage expert Angus Stewart said:
“Private landlords, especially those on standard variable rates that have seen a big jump in cost month on month, should really be carefully evaluating their finance requirements.”
He added that competition between lenders has kept interest rates low but predicted that rates will rise further. There is also uncertainty over how leaving the European Union will affect the economy.
Stewart advised borrowers to consider fixed-rate commercial mortgages. New fixed rate buy-to-let mortgages have increased interest rates, but not by much. Monthly payments on fixed-rate loan of 65% of the value of a £150,000 property has risen from £348 to £350.
Loan rates are still at low rates compared to a few years ago. To find the best rates, it helps to use a mortgage broker who can find the most favourable interest rates for landlords.
Interest rates and other costs that landlords must pay have risen over the last two years. However, investing in the rented property sector can be profitable provided the right type of property in the right location is purchased.