Experts have urged buy to let investors to seek professional mortgage advice as new figures show that average rates for investment deals are creeping up. With rates on buy to let deals rising, it has never been more important to get proper advice when taking out an investment home loan.
Data from a leading lender has also found that the average ‘loan to value’ of a buy to let mortgage advance is also rising. A broker may therefore also be able to secure you a higher loan to value than you were anticipating.
Here, we look at two reasons why a broker could help you get the best buy to let mortgage deal.
Buy to let mortgage rates creeping up
New figures from lender TBMC show that the average variable buy to let mortgage rate in the last quarter was 4.10 per cent, up from 4.07 per cent in the previous quarter.
Mortgage Introducer reports that ‘the average fixed rate for offers processed by The Business Mortgage Company in Q2 rose more noticeably to 5.06 per cent up from 4.82 per cent in Q1.’ Fixed rate buy to let deals are now at the highest level for over two years.
Islay Robinson, director of London mortgage adviser Enness Private Clients, said: “These figures show that buy to let deals have become more expensive over the last few months and so it is vital that you seek professional advice when buying. If you don’t, you could end up paying higher rates than you need to.
“Securing the best lending terms can help increase your net rental income on an investment property and can be the key to making a venture profitable. High net worth mortgage brokers have access to a wide range of buy to let deals through dozens of specialist lenders and we can help you to secure the best possible terms.” fee free mortgage broker Doncaster
Average loan to value on BTL mortgages rises in 2012
The data from The Business Mortgage Company also found that since the start of 2012 there has been a gradual increase in the average ‘loan to value’ (LTV) of buy to let mortgages. At the end of the 2011, the average loan to value for mortgage offers was 63.41 per cent. However, the average LTV in June 2012 is now 67.3 per cent, the highest for two years.
This means that you are now potentially able to take out a larger investment mortgage. This helps you maximise your borrowing on your investment properties, freeing up capital for you to use on other projects.
Andy Young, chief executive of TBMC, said: “This is great news for landlords, especially professionals who may prefer a more highly geared portfolio which can potentially allow them to release funds to buy more properties and increase their overall returns.”
Mr Robinson, of London mortgage broker Enness Private Clients, who specialise in large mortgages, added: “Many of our buy to let clients seek to maximise their lending wherever possible. So, the increased availability of 80 to 85 per cent mortgage deals on investment purchases is certainly welcome.”