Lenders have continued to up their game for landlords by offering another buy-to-let mortgage with a rate of less than two per cent.
The 1.94 per cent deal is being offered by Accord Buy To Let, which is an intermediary lender and part of Yorkshire Building Society.
- What’s the average buy-to-let mortgage deposit?
- Could this new buy-to-let mortgage deal be what landlords have been looking for?
- New data suggests a strong start to 2018 for landlords
- What type of landlord insurance do I need?
However, borrowers must have a deposit of 35 per cent to qualify for the two-year fixed-rate deal - which is also only available to existing landlords who are remortgaging.
It follows the launch of a five-year buy-to-let mortgage with a rate of 1.99 per cent from TMW, part of Nationwide Building Society, last month.
The Accord deal comes with a hefty fee of £1,495. High arrangement fees often accompany lower mortgage rates. But it makes sense for those with a larger mortgage to opt for such a deal as they may end up being better off.
Attractive elements of a mortgage deal
Other attractive elements of the Accord deal include a free valuation and no legal fees.
Separately, Accord is also offering a 2.84 per cent five-year fixed-rate deal and a 2.94 per cent five-year option.
For landlords looking to expand the number of properties that they own there is a 2.39 per cent two-year fixed-rate deal or a 2.69 per cent two-year option. These come with free valuations and £500 cashback.
Chris Maggs, commercial manager at Accord Buy To Let, said: “Whether you’re a portfolio landlord with four or more properties or a landlord with a smaller portfolio these new products, coupled with competitive rental affordability requirements, are sure to prove popular.”
Struggling to remortgage?
Lenders have begun offering more competitive deals amid concerns that landlords are struggling to remortgage.
Landlords are required to demonstrate that they can afford the mortgage if interest rates rise significantly - often to as much as 5.5 per cent or more. And those who own more than four properties face specialist underwriting that includes additional affordability tests (which could mean, for example, producing supporting documentation such as business plans).
So while more competitive mortgage rates are available, they may be harder to qualify for.
Earlier this month, the National Landlords Association revealed that 63 per cent of landlords who are aware of these changes believe it makes obtaining new buy-to-let mortgages more difficult. This increases to 70 per cent for those landlords with four or more properties.
Richard Lambert, chief executive of the NLA said: “These findings show that the PRA’s changes seem to be greatly affecting the ability of landlords to find new finance and increase their portfolios.”
He added: “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.”