Buy-to-let mortgage rates have fallen to their lowest level since September 2022, just before the disastrous mini-budget sent mortgage prices soaring.
The average two- and five-year fixed rate has fallen month-on-month and has remained below 6% since the beginning of 2024.
Last year the average two-year solution for landlords this time was 6.40% according to Moneyfactscompare.co.uk. In April this had fallen to 5.52%, last month it was 5.35% and now the average rate is 5.24%.
The data shows that the similar story applies to the five-year fixed rate, which stood at 6.32% in October last year and now stands at 5.24%.
Meanwhile, there is also more product choice for landlords, with Moneyfactscompare revealing that the number of both fixed and variable mortgages has risen to the highest level in over two years. Indeed, just after the minibudget when hundreds of mortgage products were withdrawn from the market there were 988 buy-to-let options. There are now 3,277.
Rachel Springall, financial expert at Moneyfactscompare.co.uk, said: “The buy-to-let market has had its fair share of challenges over the years, so landlords may be encouraged to see fixed interest rates trending downwards . .
“There are also many more deals for borrowers to choose from as lenders have adjusted their offering to meet demand.
“These are positive signs for potential landlords, but there are plenty of other factors to consider before taking the leap into the buy-to-let sector, not just the cost of a mortgage. The profit margin from rental income may be smaller than expected, but real estate is still seen as a safe long-term investment.”
The data comes just a week after a Hamptons report revealed how a peak in the number of landlords opening companies from which they can manage their real estate portfolios.
And it also comes just days before Chancellor Rachel Reeves is due to present Labour’s first budget. Mortgage experts say lenders will wait for the speech before changing their prices further.
Springall added: “Landlords will be on edge to see how the upcoming budget will play out and lenders may remain fluid with their fixed interest rates in the coming weeks, especially due to the volatility around swap rates.
“Any borrower concerned about their current situation would be wise to seek independent advice if they need support, or keep up with the latest deals if they need to refinance in the coming months.”