Landlords on standard variable rate mortgages could potentially halve their monthly payments by switching to a fixed rate mortgage, according to Property Master.
Property Master’s Mortgage Tracker finds the monthly cost of an average buy-to-let standard variable rate mortgage for a £150,000 home loan rose from £620 in September to £629 in October. This follows the increase in the bank base rate from 0.5 per cent to 0.75 per cent in August.
In January, the average monthly payment stood at £602 according to Property Master’s calculations. This means landlords on variable rate mortgages are typically paying £27 more per month for their mortgage than they were at the start of the year.
The online broker says that switching from a variable rate to a fixed rate mortgage could save landlords between £218 and £352 per month.
Property Master chief executive Angus Stewart says: “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. 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.”