The recent government measures have resulted in a general fear that the private rented sector will shrink. Therefore, lenders have been using their fixed rate products to incentivise and attract new borrowers in an increasingly competitive market. Fixed fee mortgages are becoming increasingly popular with landlords hunting for the best value mortgage deal. While standard variable rates have been most affected by the increase in bank rate rises, the impact on fixed-rate mortgages has varied.
It’s welcome news for landlords, who at present have over 1,000 fixed rate mortgages available to them.
Fleet Mortgages, a specialist and BTL lender, has recently launches fixed-fee mortgages across three of its major sectors: HMO/multi-unit block, limited company and standard.
Fleet’s launch of new fixed-fee mortgages will offer greater product choice and savings for landlords seeking new deals in the BTL market. This is especially relevant as a recent study by Property Master estimates that landlords are currently paying £27 more on average per month than at the start of 2018 on their mortgages.
The new products include two- and five-year fixed products. The unlimited loan size standard 2-year fixed mortgage has a fixed fee of £4,999 and interest 3.49% whilst the same product with a loan of £250,000 or less has an interest rate of 3.09%.
The 5-year product has a fixed LTV of 75% and offers a rate of 3.79%, and the same set up fee of £4,999. There is also a pay rate 3.99% product that has rental cover at 135% of the initial rate.
The limited company rates remain the same as the standard rates across the two-year fixed mortgages, whilst the 5 year mortgage is 0.1% higher at LTV of 75% and the pay rate product is 3.99% at rental cover of 125% of the initial rate. All initial set up fees are fixed at £6,250.
Two-year fixed rates for HMOs are available for 3.59% at 65% LTV or 3.69% at 75% LTV, plus there’s a five-year fix at 3.99% at 75% LTV all available with a fixed fee of £7,499.
According to Bob Young, Chief Executive at Fleet Mortgages, the company has noticed a significant rise in buy-to-let activity in recent months, with professional landlords seeking to expand their portfolios and others exploring refinancing options to release capital for new purchases.