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 There have been a couple of changes this week that have started us thinking that there is a bit of a mood change in the buy to let world.
Even though swap rates have slowly reduced in the last month, today I am going to give you a couple of examples of lenders slightly tightening their criteria. Where interest rates are heading is a moot point but the pricing of buy to let mortgage deals at the moment certainly seem to have lost any connection they may have had with bank of England base rate. There is a very wide gap between buy to let mortgage rates and residential rates and they seem to be heading further apart. Add into the mix the dearth of buy to let mortgage lenders and buy to let mortgages look like they are heading slowly back upwards.
So is this bad news? Well, to get it into perspective even though base rate remains at 0.5%, the buy to let mortgages on offer are still very low compared to a year ago (in fact I checked our newswire from the 14 May 2008 and the best 75% mortgage was 6.19%) however the fact is that with less lenders about as soon as interest rates have a hint they will be rising then buy to let mortgage rates will rise too. Tip of the week – Want to cap your mortgage payments? Are you concerned about what interest rates may do in the next couple of years? If so then read on: If you had the chance to: 1. Cap your current variable rate at just 2% above your current rate – in other words if rates rose beyond 2% you wouldn’t pay anymore than the initial 2% rise. 2. Have no legal or valuation fees. 3. No minimum loan to value – in other words even if you were in negative equity you could have this capped product. 4. Pay an arrangement fee of no more than 1.5%. · You can use this for buy to let, residential and commercial. · For just 1 or all of your properties. · Use it to hedge interest rate rises across your portfolio. Well we do have such a product available. It’s certainly not for everyone but call us on 01424 205 373 and we can explain how investors are using this product right now. |