Fee free BTLs grow in popularity
At the same time products with percentage-based fees made up 37% of products in Q3 from Q2.
Lender arrangement fees, valuation fees and legal costs added 0.48% onto the headline rate in the third quarter, up from 0.52% in the previous quarter.
Simon Whittaker, finance director at Mortgages for Business, said: “The recent falls in swap rates, almost back to levels similar to the start of the year, have helped lenders trim prices but whilst they continue to be attracted to the BTL space, they are having to be ever more creative to find the balance between maintaining their margins and offering competitive products.
“When looking at the market and the wider economy, the balance seems to have tilted towards there being no increase in bank rate for quite a few months yet.”
Although absolute products numbers by initial term (1-5 year rates and loan term products) rose across all categories year-on-year, the market share of 2-year products has declined from 54% in Q3 2014 to 43% today. Longer-term products, particularly 3 and 5-year rates have increased their market share by 9% between them.