Cost of five year fixed rate buy to let mortgages falls

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The Buy to Let Mortgage Index has revealed that the cost of a five-year fixed rate buy to let commercial mortgage fell in the first quarter of 2018. The average interest rate of these mortgages is now 3.52%, down from 3.55% during the first quarter of 2017.

Three year fixed rate mortgages have increased slightly, from 3.33% to 3.34%. Two year fixed rate deals have risen from 2.93% to 3.01%.


The swap rate which measures the cost for lenders of raising money has increased, but this has not affected the rates that many lenders offer. Low rates are a result of intense competition between lenders.

Mortgages for buy to let landlords who have formed limited companies have also seen interest rates fall, except for five-year fixed rates, which have risen from 4.2% to 4.3%.

These rates are typical rates and will vary between lenders. A commercial mortgage broker can find the best deals for investors.

To stand out from their competitors, 19% of lenders have abolished arrangement fees for commercial mortgage, whilst 39% charge an average fee of £1,441.

As a result of recent increased costs of stamp duty and reduction of tax relief on mortgage repayments, it has been difficult for landlords. The large number of lenders offering commercial mortgages for landlords at competitive rates shows that buy to let investing is still popular. There is a high demand for privately owned rented accommodation in most British cities and towns.

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