Mortgage costs are falling!

Data from a number of sources show that the costs of Buy-to Let mortgages are falling, and residential mortgages are at an all-time low over the last 5 years as lenders are fighting to offer the best deals available.

Recent research from Property Master found that the biggest fall was for 5-year fixed rate buy-to-let mortgage offers for 65% of the value of a property, which fell by £48 per month between February 2019 and February 2020 for a £150,000 mortgage.

This is clearly good news for landlords who are finding themselves increasingly capable of squeezing more profit out of their investments, especially in light of the changes to Stamp Duty made four years ago. Those changes saw the then government add a 3% surcharge to buy-to-let property and consequently saw a rush for landlords to beat the deadline.

Another Source, this time Mortgage Brain, supplied analysis last December showing that BTL mortgages continued to reduce at the end of the year, Reflects the 2019 trend of a continued decrease in costs for the majority of BTL mortgages.

The cost of a 60% LTV two year Fixed BTL mortgage in December was 1.7% lower than it was 12 months before. The reduction in costs represents an annual saving of £126 on a £150k mortgage. Rates also remain low on a 70% LTV two year Tracker BTL mortgage with no significant change over the three months up to December 2019. However costs were reported as being 4% lower than December 2018, equivalent to an annual saving of £324 on a £150k mortgage.

Mark Lofthouse, CEO of Mortgage Brain, comments:

“Our latest BTL quarterly analysis shows some cost reductions over the last three months. When viewed over the course of 2019, they show that there has been a continuous reduction in rates resulting in substantial price reductions particularly for five-year fixed rate products.

 “With specialist advice and support from brokers, landlords can continue to make the most of the low rates and be confident they are getting the best mortgage to suit their needs.”

What about residential mortgages?

Last month, Mortgage Brain presented more findings specifically related to residential mortgages. The substantial finding was that residential mortgages are at an all-time low since 2015.

The main Mortgage Brain findings, published last month are:

  • The cost of 60, 70 and 80% loan to value (LTV) 5yr fixed rate mortgages are down by up to 5.7% since January 2019 and up to 14.4% in the last 5 years
  • The cost of 60, 70 and 80% LTV 2yr fixed rate mortgages are down by up to 4.1% since January 2019 and up to 11.5% in the last 5 years
  • Cost reduction equates to annual saving of up to £432 over past 12 months and £1,206 for a £150,000 loan

Again, Mark Lofthouse commented:

 “With mortgage costs down by up to 17.8% compared to January 2015, there are savings across the board that advisers are able to offer their customers. Mortgage costs remain at historic lows and forecasters are predicting that this will continue in to 2020.”

Here at Aspen Woolf we have a number of investment opportunities across the UK to suit all levels of investor. With low mortgage rates and nuge interest since the General Election and the recent confirmation of HS2, we’re expecting 2020 to be a big year. Why not have a look at what we have on offer.