Landlords can find commercial mortgages at less than 2%, but not all landlords qualify
for these low rates.Rates of around 1.94% a fixed for two years are available for investors but they must find a 35% deposit.
Higher arrangements fees of up to nearly £1,500 can be charged for lower rate mortgages, but in the long-term mortgage rates, less than 2% can be cost-effective especially if the mortgage is for a large amount. Some lenders are offering incentives such as free valuations, cash back, and legal fees.
Five-year fixed rate commercial mortgages will be at a higher rate of just less than 3%. Portfolio landlords with a number of properties can find fixed rate deals between 2.39% and 2.69%.
Low rates are available for new mortgages and to remortgage property. Money can be saved by remortgaging to a lower rate loan. Stricter affordability criteria from the Bank of England has affected landlords with more than four mortgaged properties who may find it more difficult to qualify for a lower rate mortgage.
The National Landlords Association (NLA) is critical of the stricter lending rules. The chief executive of the NLA, Richard Lambert said:
“Given that the private rented sector now makes up 20 per cent of the housing market, it is vital that professional landlords are incentivised to continue providing good quality affordable housing to those who need it. This appears to be achieving quite the reverse.”
