Fees add 0.55pc on to average annual BTL costs

Nia Williams

February 6, 2013

Costs were at a peak in 2010 when they added 0.66% to the average cost but this has since fallen to around 0.57%.

Unsurprisingly fees have a greater impact on short-term mortgages. In 2010 they added an average of more than 1.13% to annual costs whereas this is now around 0.85%.

The results were revealed in 12 indices which track the average buy-to-let mortgage costs of two, three and five year fixed rates and discounted/tracker mortgage products at 65% and 75% loan to value.

The data was extracted from details of more than 16,000 buy-to-let mortgage products from 2008 onwards held in Mortgage Flow, the broker’s bespoke sourcing tool.

David Whittaker, managing director of Mortgages for Business, said:“By including fees we have produced indices that more accurately reflect the cost of taking on a buy-to-let mortgage without the distortions caused by the way lenders structure fees on products to meet marketing requirements.

“Lender arrangement fees vary enormously. Some products carry a flat fee but most have percentage fees which can be in excess of 3%.

“This can make headline rates extremely misleading.”

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