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How buy-to-let mortgages have been affected by base rate rise

Bank of England

The announcement of the Bank of England’s base rate rise on 2 November was expected to have a significant effect on buy-to-let mortgages.

As lenders reviewed their products and landlords analysed the impact on their existing property investments and future plans, mortgage experts awaited the fallout following a year of regulation changes already affecting the BTL market.

According to Moneyfacts, the average two-year tracker has risen by 0.20% since the announcement. In fact, within two weeks Barclays, Santander, HSBC and Halifax had all increased their variable Rate products by 0.25%, passing the full cost of the rise onto consumers.

Faced with increased monthly repayments across several properties – a quarter percent rise on a £200,000 loan means paying an extra £40 per month – many landlords could start reviewing their existing buy-to-let deals and seeking a better deal.

Not all lenders passed on the full rate rise

Although most of the current offers are slightly more expensive, there are still good value deals to be found. Interestingly, both the Royal Bank of Scotland and Natwest reduced their rate on two-year fixed rates by 0.15% and on five-year fixes by 0.2%.

Mark Bullard, head of sales at NatWest, said: “Having declared our intent to continue to fully support the buy-to-let sector under the new PRA requirements, it’s timely that we are able to announce such significant cuts to both our rates and product fees on so many of our buy-to-let deals.”

With savings rates still low, buy-to-let consistently outperforms other investment types. It seems that the base rate increase is unlikely to deter the serious investors from seeking out the best buy-to-let deals.

The post How buy-to-let mortgages have been affected by base Rate Rise appeared first on BuyAssociation.



This post first appeared on BuyAssociation, please read the originial post: here

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How buy-to-let mortgages have been affected by base rate rise

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