Buy-to-let landlords are benefiting from increased choice and record low mortgage rates, so where are the best deals?
10-20-2015
Falling rates: Buy-to-let mortgages have fallen to their cheapest level across all LTVs and deal terms
There are 1,108 buy-to-let deals available to landlords, according to Moneyfacts, up from 758 last year and 295 in 2010.
The average two-year fixed rate on a buy-to-let deal based on a 60 per cent loan to value (LTV) has fallen to 2.60 per cent.
This is down from 3.04 per cent last year and 5.08 per cent in 2010.
Shopping around for a combination of decent rate and low fee is crucial to cut the cost of buy-to-let.
We reveal some of the top deals below.
40 per cent deposit/60 per cent LTV
Accord Mortgages, the broker arm of Yorkshire Building Society, currently offers the lowest fixed- rate buy-to-let mortgage on the market at 1.84 per cent with a £2,625 fee for a two-year fix.
A 25-year £150,000 interest-only mortgage on this rate would have monthly payments of £230 a month and a total cost including fees of £8,145 over two years.
But you could make savings by paying a slightly higher rate with a lower fee.
NatWest offers a rate of 2.02 per cent with a £1,995.
The monthly payments on a 25-year £150,000 mortgage would work out at £252 but the overall cost would be cheaper at £8,055 over two years.
For a longer-term fix, Leeds Building Society offers a five-year rate of 3.2 per cent with a £999 fee.
A 25-year £150,000 mortgage would cost £400 a month and £24,999 over five years.
25 per cent deposit
Barclays offers a two-year fixed rate at 2.54 per cent with a £1,999 fee.
A 25-year £150,000 mortgage would cost £317.50 a month and £9,619 over two years.
Metro Bank and Virgin Money offer the lowest five-year fixed rate for a 25 per cent deposit at 3.79 per cent.
Metro Bank charges a £1,999 fee, while Virgin Money has a £2,494 charge alongside £500 cashback.
A 25-year £150,000 mortgage with Metro Bank deal would cost £30.379 over five years, and the Virgin Money deal would work out at £30,374 after the cashback.
| Deposit | Deal term | Lender | Rate | Fees | £150,000 mortgage cost |
|---|---|---|---|---|---|
| 25% | Two-year fix | Barclays | 2.54% | £1,999 | £8,145 over two years |
| 25% | Five-year fix | Metro Bank | 3.79% | £1,999 | £24,999 over five years |
| 40% | Two-year fix | Accord Mortgages | 1.84% | £2,625 | £9,619 over two years |
| 40% | Five-year fix | Leeds Building Society | 3.20% | £999 | £30,379 over five years |