Mortgage Brain has reported “mixed movement” in the cost of buy-to-let products over the past three months.
The cost of a 60% and 70% two year tracker buy-to-let mortgage, for example, is now 2% more than it was three months ago; while a 60% LTV two year fixed (at a current rate of 1.84%) now costs 1% more than it did in August.
A two and five year fixed (80% and 60% LTV respectively), however, have remained stable over the past three months with buy-to-let mortgage costs remaining static when compared to beginning of August.
With a current rate of 2.09% and 2.44% respectively (as of 1 November 2018), the 2% cost increase for the 60% and 70% LTV two year tracker mortgages equate to an annualised increase of £126 and £162 on a £150,000 mortgage.
However, Mortgage Brain’s latest data shows that the costs of a 70% LTV two and three year fixed, and an 80% LTV five year fixed, have all come down by 2% over the past three months.
In financial terms the 2% drop in the cost of these mortgages offers potential investors and buy-to-let borrowers a potential saving of up to £144 over the past quarter, or £432pa when compared to this time last year.
Mortgage Brain’s analysis also shows the true cost differences between buy-to-let mortgages compared to mainstream residential products. The latest figures (as of 1 November 2018) show that the cost of the 80% LTV five year fixed buy-to-let mortgage is 24% higher than the same product type for a residential mortgage.
Similarly, an 80% LTV two year fixed buy-to-let mortgage costs 20% more than its residential equivalent, while a 60% LTV two year buy-to-let tracker costs 12% more.
Mark Lofthouse, CEO of Mortgage Brain, said: “With little movement in mortgage costs in the buy-to-let sector over the past three months our latest analysis shows that, while there isn’t too much to get excited about, there are still cost savings to me made with a number of buy-to-let products offering favourable rates.
“The buy-to-let market remains unsettled though and although there are plenty of predictions for further fluctuations over the coming months, any changes to costs and rates are expected to be slow and marginal.”