Number of 5-year buy-to-let fixed rate deals doubles
Research from Mortgages for Business found that in Q2 2014 there was an average of 128 5-year fixed rate buy-to-let mortgage products available compared to just 50 in 2012.
David Whittaker, managing director of Mortgages for Business, said: “This is a welcome development. We’ve been recommending 5-year fixed rates for some time now and even the Financial Conduct Authority has expressed a preference in this regard.
“Recent feedback from our landlord customers identified that 34% would currently choose 5-year fixed rates, not only because they are competitively priced but also to protect themselves against pending rate rises.”
The research found that the increase in the number of longer term products has been at the expense of 1-year rates which have fallen out of favour.
In 2010 1-year products accounted for 18% of the market but by Q2 2014 this figure had dropped to just 1%.
Over the quarter, 2 and 3-year swap rates moved 0.2% higher, 5-year rates increased by 0.1% and 10-year rates have scarcely moved.
These movements have not been sufficient to affect a rise in buy-to-let mortgage rates.
There was a general reduction of 0.1% across most buy-to-let product ranges in the competitive 75% LTV sector.