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Buy to let property investors on standard variable fixed rates could save between £218 and £352 per month through switching to a fixed rate mortgage according to new research.
The research from Property Master revealed that landlords using standard variable buy to let rates could be losing unnecessary money through their mortgages. The online mortgage broker uses algorithms to to match the requirements of individual private landlords in comparison to the entire buy to let mortgage market.
It found that the monthly cost of an average buy to let Standard Variable Mortgage (SVR) rate for a typical sum of £150,000 grew from £620 in September to £629 in October.
The growth comes alongside the increase in the bank base rate in August. Rates rose above 0.5 per cent for the first time in a decade. There was a year-on-year rise of £27, up from £602 in January to £629 now.
However, while some fixed rate mortgage rates have increased since the start of the year, others have fallen slightly due to greater competition between lenders. For landlords looking to refinance this is good news as there are many cheaper options available.
Property Master’s chief executive, Angus Stewart, explained: ‘Obviously the increase in bank base rates has affected Standard Variable Rates the most but it does appear the situation is more mixed amongst fixed rate loans. Whilst some have crept up others such as the more popular fixed rate five-year loans have fallen back slightly since last month. Landlords look to be benefiting from a surge in competition amongst lenders particularly as those lenders fear that a raft of recent government measures will reduce the size of the private rented sector.’
He continued: ‘Remortgaging figures look very healthy but the number of new mortgages taken out by landlords is falling. The good news is there are over 1,000 fixed rate mortgages alone on offer currently for landlords so shopping around is essential.’