Buy-to-Let Mortgages Bloom as Boxes of Deals Skyrocket
High Demand for Buy-to-Let Mortgages Surges as Average Two-Year Rates Dip Under 5% for Initial Time Since 2022
In the great board game of property investment, landlords are seeing their pieces elevated to new heights, as the number of buy-to-let mortgages, aka the game's hottest commodity, reaches an all-time high—a whopping 4,144 deals, according to the number crunchers at Moneyfacts.
This mind-bending increase in deals reflects a staggering 98% surge since June 2023 and a lofty 42% increase compared to the same time last year, when a mere 2,935 opportunities lay awaiting ambitious investors.
Amid the hyper-competitive landscape, the race among lenders to outdo each other on mortgage rates has led to a significant drop, with the average two-year fixed rate for buy-to-let deals diving below the 5% mark for the first time since September 2022. For those boasting a 25% deposit or stake, an average two-year fix can now be nabbed at a cool 4.96%, contrasting sharply with the 5.59% fire sale price of last year.
Let's do some quick math on that $200,000 mortgage: nabbing the lower rate means slashing your monthly installment from $932 to a more manageable $826. Talk about pocket change!
Ramp it up to a 40% deposit or stake, and you can secure a cool 4.46% average rate, down from 5.25% this time last year. Once again, wielding your economical expertise, you're able to reduce your monthly payment on that $200,000 mortgage from $875 to $743. How's that for a nest egg boost?
Now, let's joyride it out for five-year fix enthusiasts. Although it might lack the thrill of the two-year ride, it ain't half bad. The average five-year fix for those with a 40% deposit or stake has dropped to 4.51%, down from its hefty 4.93% price this time last year.
But remember, every silver lining boasts its cloud. In an effort to lure investors with low rates, lenders are often slapping on commanding fees. These charges can swell to a staggering 10% of the total mortgage in some cases. On a $200,000 mortgage, that's $20,000! So, before popping the champagne cork—let’s call it a festive can of beer—compare the total cost of the mortgage, weighing both fees and interest rates.
Clutching for a Better Rate
Though mortgage rates have improved on average compared to last year, shrewd investors will find they can secure deals below 4.5% without trying too hard.
For example, a remortgaging investor with at least 40% equity in their property can nab a five-year fix at a scintillating 4.28% with NatWest, with a modest $59 fee or a cool 4.29% with HSBC with no fee (seriously, easy pickings!)
Slapping a $200,000 mortgage on that 4.29% rate would result in a monthly payment of $716. Game changer, indeed!
Seeking the Lowest Buy-to-Let Rates? Here's How!
Now that you've ticked "find a better mortgage deal" off your to-do list, it's time to flex your finance muscles and take control of your property investment empire. Quickly compare the best rates with This is Money's partner L&C, a fellow champion of savvy financial moves.
Head over to their mortgage calculator and feast your eyes on various deals tailored to your property value and deposit level, from two-year fixes to ten-year fixes. You can even compare the best tracker rates! With This is Money and L&C by your side, dreaming big doesn't have to break the bank.
- Investors might be enticed by the increased number of buy-to-let mortgages, particularly those interested in personal-finance and investing, as it provides more opportunities in the property market.
- As technology advances, smartphone users can leverage apps and online tools, such as This is Money's partner L&C's mortgage calculator, to compare various finance options, including mortgages, and make informed decisions about their personal-finance and property investments.
- In the realm of property investing and personal-finance management, staying informed about and comparing mortgage rates can result in significant reductions in monthly payments, as seen when switching from a 5.59% rate to a 4.29% rate on a $200,000 mortgage.
- The impact of new technology, like smartphones and finance apps, on personal-finance and property investment can be substantial, as they enable people to access a wealth of information, such as the best buy-to-let mortgage rates, at their fingertips, thereby empowering them to make informed decisions and optimize their financial situations.
