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Buy-to-let rates fall for the cash-rich: Average two-year deal for borrowers with a 40% deposit drops to 2.27%


02-23-2017

 

Buy-to-let mortgage rates are falling but only if you have a big deposit. 

The average two-year rate for borrowers with a 40 per cent deposit has dropped from 2.59 per cent to 2.27 per cent in the past 12 months.

Last month, Santander launched a top two-year deal at 1.44 per cent. Platform, part of the Co-operative Group, also has a new deal at 1.54 per cent.

New deals: The average two-year deal for borrowers with a 40% deposit is 2.27%

New deals: The average two-year deal for borrowers with a 40% deposit is 2.27%

Monthly repayments on a 150,000 loan would be 596 and 603 respectively. The total cost with Santander is 16,295, and Platform 16,464 both include a 1,999 fee.

But if you have less than a 40 per cent deposit, rates are starting to creep up. If you have a 30 per cent deposit, the average rate has risen from 3.02 per cent to 3.17 per cent in the past month alone.

David Hollingworth, of broker London & Country, says: 'Forthcoming tax hikes and tougher criteria for loans means some landlords are desperate to switch to a better rate.

'Lenders are fighting over themselves for the best customers those with bigger deposits.'

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