Landlords enjoy greater buy-to-let mortgage choice but rates remain high – and some investors who can’t remortgage are stuck paying 9.5%

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  • The selection of rental products is back to pre-mini budget levels.
  • But experts warn that rates are high despite a slight decline in the cost of home loans.
  • Experts say these cuts do little to help landlords cut interest rates.

Buy-to-let mortgages in the market have recovered to levels last seen in August 2022, before the mini-budget cut the sector.

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Mortgage rates are also falling, but remain much higher than they were two years ago.

According to new data from finance firm Moneyfacts, overall availability of products for sale has increased by 7% over the past month.

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There are currently 2,400 mortgage products for landlords, the highest number since last July.

At the same time, average mortgage rates continued to decline on both two-year and five-year fixed deals.

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However, those who opt out of the fixed deal will still face a mortgage shock: current rates are still about 2% higher than two and five years ago.

Out of the market: Rental products have all but dried up after a sharp rise in borrowing costs following last year’s mini-budget.

Currently, the average two-year fixed mortgage rate is 5.81%, regardless of the size of the deposit.

This is down from 5.95% last month, but significantly higher than two years ago, when the figure was 3.05%.

And today’s rate is an even bigger jump from five years ago, when the typical landlord mortgage was 2.96%.

This means that a borrower with a £200,000 25-year mortgage is now paying £1,265 a month in interest, £321 more than five years ago and £311 more than two years ago.

Rachel Springall, financial expert at Moneyfacts, said: “With average two- and five-year flat rates above 5% compared to about 3% a year ago, it’s clear landlords are likely to see their monthly payouts. much higher than they might have thought.


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“Landlords can wait for fixed mortgage rates to drop even further, or actually choose a tracking mortgage to give them more flexibility to eventually change their deal.

“However, interest rates are only part of the decision-making process when entering into a buy-to-let deal. Whether it’s new or existing landlords, it’s always wise to seek advice to make sure now is the right time to make a deal.”

There are cheaper deals

There are currently lower rate deals on the market that are worth exploring.

The Mortgage Works offers a flat rate of 3.99% from purchase to rental…

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