A ten year fixed rate buy to let mortgage went on sale this week, highlighting the competition between lenders to try and offer the most enticing deals possible.
Ten year fixed rate mortgages were fairly unheard of until recently, when they suddenly exploded into the lending market.
Offering a decade’s worth of immunity to the variable rates of the Bank of England, they are very tempting deals.
Now, however, there is a buy to let ten year mortgage available. The Mortgage Works launched the offer through Nationwide, with an interest rate of 4.99 per cent.
For aspiring landlords, this is a very good looking deal. Being locked in to the same rate for ten years will mean that among the other issues a landlord has to face in setting up a property for rent, a change in interest rate is not one of them.
However, it will require some capital to push the deal through, with a reported fee of £995 from the start, and a fairly high interest rate which may be a struggle to match with a tenant’s rent.
Of course, a ten year fixed term is a long commitment, but research by Mortgages for Business, a specialist broker, found that up to 10 per cent of landlords asked would consider buying into a decade long contract.
Although this is the first of its kind on the market, if it is successful, we could likely see more become available, just as more and more ten year fixed rate mortgages have become available on the residential market, and this, in turn, could lead to lower interest rates as lenders compete.
