Long-term fixed rate mortgages provide accurate business forecasts
Many lenders offer fixed rate commercial mortgages for buy to let landlords and this sort of arrangement makes it easier to create accurate business plans.
At the beginning of August 2018, the Bank of England interest rate was raised, and future increases are said to be likely. Mortgage lenders usually raise their rates following a Bank of England rate increase. It is impossible to accurately predict how far interest rates will rise over the next few years. This makes it difficult for a landlord to make accurate cash flow forecasts for their business.
Fixed rate mortgages are generally for a period of between two to five years, though it is possible to find ten-year fixed rate mortgages. The initial interest rate may be a little higher than the current standard commercial mortgage rate, but if rates go up, borrowers continue to repay the same monthly amount on their fixed rate mortgage.
There is uncertainty about the economic impact of Brexit but buy to let investing can still be profitable. Many landlords prefer the certainty of fixed rate mortgages to enable them to predict cash flow and profitability more accurately. The good news is that some lenders have cut their interest rates in 2018n on fixed rate buy to let mortgages.
With a wide range of lenders and fixed rate mortgage products available, to make sure that a landlord has the right deal, a mortgage broker can find the best fixed rate mortgages at competitive interest rates.