Fewer Buy to Let Mortgage Deals Available for Landlords

Are you looking for a new buy to let mortgage deal right now? If so, you could be in for a rocky ride. Interest rates have risen since the start of the coronavirus pandemic. And many buy to let mortgage deals have disappeared from the high street.

Back in November 2019, landlords had around 2,500 mortgage deals to choose from. Now, there are only 1,892. That’s a huge drop of 31%, and for landlords looking to borrow money to fund a new purchase or refinance an existing property, less choice means rising costs.

Interest Rates are Rising in the buy to let Mortgage Sector

Interest rates for an 80% LTV product have increased by 0.6% for a two-year fixed-rate deal, and the average rate is currently 4.16%. Landlords after a 60% LTV buy to let mortgage can now expect to pay 2.9% for a two-year fixed-rate product, compared to 2.77% back in March. This might not sound like a massive increase, but it can push up monthly repayments by a significant amount on a large loan.

The best way to save money when seeking a new financing deal is to perfect your application and use a broker to search for the most cost-effective deals. With this in mind, a leading mortgage broker has devised a savvy new tool to help landlords find cheap rates aligned with their individual circumstances. 

AI buy to let Mortgage Comparison Tool

The Property Master tool, as reported in the Money Mail, uses artificial intelligence to search for the best deals. Landlords can specify whether they are a limited company or a sole trader. Landlords can also adjust their application by adding in more equity or borrowing slightly less, to see how that changes the deals they are shown. The tool tracks all mortgage products and incorporates each lender’s unique affordability rules.

The tool’s creator says it is an AI equivalent of a price comparison website, but unlike those websites, the products shown exist in real-time. Landlords are shown the actual savings they could make if they choose individual products. In addition, there is no bias in the rankings, whereas price comparison websites typically rank products according to whether the product is being ‘promoted’, which makes it hard to judge whether a ‘deal’ truly is a deal.

Cut Buy to Let Borrowing Costs and Save Time

A buy to let comparison tool like this could be especially useful for landlords hoping to cut their borrowing costs, and it could also save a lot of time. You can use the tool to find a deal that suits your requirements and then approach a mortgage broker to discuss the finer detail.

Online lender Molo tested the tool and judged it to be useful compared to other tools out there.

“It provides not only the answer to the ‘how much can I borrow?’ question, but also the available cost for different loan amounts and, most of all, it doesn’t focus only on interest cost but on monthly cost, which is what most landlords really care about.”

Mortgage Interest tax Relief has hit Landlords Hard

With the slashing of mortgage interest tax relief, it is now more important than ever that landlords monitor their borrowing costs and try to save as much money as possible.

There is still time to take advantage of the chancellor’s stamp duty holiday, so get your skates on and start searching for a mortgage deal. But be aware, that the time it takes to approve applications has increased, which could delay the transaction.

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