Buy to let lenders adjust rates ‘upwards’ following Bank rate increase

13/09/2018 11:42:13

A number of lenders have now passed on the recent interest rate hike to mortgage customers, which means that borrowers, including buy-to-let landlords, will see their bank’s standard variable rate (SVR) increase.

Since the Bank of England hiked the base rate to 0.75% in August, most lenders have made plans to increase not just their SVR, but also their buy-to-let mortgage rates, according to fresh research by Property Master.

By using algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market, the online mortgage broker reports that average standard variable rates for buy-to-let mortgages saw the biggest month-on-month increase with the cost of an interest-only loan of £150,000 jumping from £603 per month to £620 per month. 

For average five-year fixed rates loans, increasingly popular with private landlords in light of increasing interest rates, the cost of a similar loan rose from £348 per month to £350 per month if the customer was looking to borrow 65% of the value of the property, and from £423 per month to £425 per month if 75% of the property’s value was required.

The news comes as the Monetary Policy Committee prepares to meet again today.

Angus Stewart, Property Master’s chief executive, said: “The move by the Bank of England to normalise borrowing rates following the last market crash seems to be truly underway and it is beginning to feed through to buy-to-let mortgage rates which up and until now have been relatively stable. 

“The MPC meets again [today] but market commentators are not yet expecting another rate rise quite so soon.”

Private landlords, especially those on standard variable rates that have seen a big jump in cost month-on-month, should really be carefully evaluating their finance requirements, according to Stewart.

He added: “Whilst increased competition has helped to keep costs down to some extent the trend is now upwards and we would expect keenly priced fixed rates to be snapped up.”

Source: Landlord Today

Now could be the time to look at your current mortgage. We work in partnership with fully authorised and regulated mortgage advisors who can arrange the mortgage finance and insurance products for the purchase or remortgage of your property.

To speak to an advisor get in touch with your local Scottish Property Centre branch today.

Related:

Base rate increases to 0.75%

UK base rate remains at 0.5%

Investors bet on spring interest rate rise

What rising rates mean for mortgage and savings

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