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B2L fixes cheaper than trackers

Sarah Davidson

February 3, 2015

Low LTV 2-year fixes now average at 3.5% compared to 4.0% for trackers, while similarly low LTV 5-year fixes average at 4.2% compared to 4.5% for trackers.

There are now a record 817 buy-to-let products available, up 16% from Q3 2014.

David Whittaker, managing director at Mortgages for Business, said: “Lenders continue to compete fiercely for the ever-growing buy to let market with more than 100 extra products available in the last three months.

“This unprecedented pick up reflects the huge increase in demand as well as the wider importance of the buy to let industry.

“Looking at total lending in 2014 the trend is clear. For a second consecutive year the value of the BTL market grew by almost a quarter.

“We anticipate further growth in 2015 but at a slower rate as the market takes an inevitable breather after such a huge sustained spurt.”

Charges are also cheaper on low LTV fixes, costing 0.39%, down from 0.62% in Q1 2013.

In terms of high LTV buy-to-let products 2-year fixes and trackers both average at 5.8%, although 5-year trackers are still cheaper than fixes, standing at 5.6% compared to 6.0%.

At medium LTV 5-year trackers cost 4.7% compared to 5.0% for fixes, although 2-years fixes are cheaper than trackers at 4.4% compared to 4.7%.

Whittaker added: “It’s astounding that fixed rate mortgages are already better value than their respective tracker counterparts.

“Again the real advantage is for the ‘safest’ landlords with the lowest LTV loans.

“But even though tracker products are a little bit cheaper at higher LTVs, in these cases too it soon won’t be enough to compensate for the likely increase in cost of trackers when rates inevitably rise.”


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