Landlord concern over mortgage interest rate rises are not limited to residential customers. Landlords are also positioning their finances with possible prospect of future interest rate rises.
Several Lenders are now tempting BLT investors with 10-year fixed-rate morgtages, which offer certainty of payments over a longer period.
A few lenders are now offering 10 year fixed rate mortgages for landlords. Yorkshire Building Society and the TSB are just few from a list of lenders offering 10 year fixed rate mortgages.
BLT landlords have already seen their yields been squeezed in recent years by recent government tax changes. Landlords who are highly geared financially may find interest rate rises more challenging. Although economist’s argue that the letting market is cooling and this will in turn effect the wider economy. This some argue means further interest rate rises in the short term are unlikely.
Some landlords are using fixed-rate mortgage deals to protect themselves against this and future interest-rate rises. Banks are now rolling out deals in an attempt to attract landlords looking for long term mortgage deals.
Investec has targeted this market by launching a 10-year fixed-rate buy-to-let mortgage at 3.69pc.
Mark Harris of SPF Private Clients, a mortgage broker, said this was one of the few 10-year deals targeted at landlords. “While we are seeing more 10-year fixes in the residential space, they are far less common for landlords,” Mr Harris went on to say; “However, borrowers should ensure they don’t lock in for too long or face a hefty early-repayment charge to get out of the mortgage during the fixed period if they need to sell during that time. A few landlords were signed up to 10-year deals, they provided a useful option. ”
It would seem the big picture is that mortgages are at historically cheap rates already. If you can slash £1,000’s off your cost and get peace of mind that you can afford it (and if you’re worried about uncertainty, go for a longer fix) then do it. Yes, there’s a chance it could get even cheaper, but if you’re bagging something that’s easily affordable, that safety and certainty has a value too. Playing the market is never a sure-fire win.