Reported by Landlord Today, lenders have cut interest rates to make life easier for landlords, who have been hit by changes to buy-to-let mortgage interest relief as well as increased stamp duty charges and stricter affordability tests introduced by the Bank of England.
With lower interest rates lessening the impact of these changes, lenders have responded with a raft of new competitive deals. Among those announcing rate reductions are New Street Mortgages, who have introduced a high street beating rate of 1.59% at 65% LTV with a 1.5% completion fee for its 2-year discount product and just 1.94% at 75% LTV, also with a 1.5% fee. At the same time, New Street has cut rates on its fixed rate products. Their 2-year fixed rate mortgage has been cut to 1.69% from 1.99% at 65% LTV.
Speaking to Landlord Today, Steve Griffiths, director of sales and distribution at parent company the Northview Group, said: “With all the changes we have recently seen in the buy-to-let market and with more to come, we’re determined to offer brokers deals that offer great value for our customers.”
Meanwhile, Barclays has launched its best ever range of fixed rates, which include a 2.09% two-year fixed at 75% LTV with a 1% completion fee, a 2.99% five-year fixed at 75% LTV with a 1% fee and a 2.99% 10-year fixed at 65% LTV with a £2,000 fee.
Commenting, Craig Calder, director of Barclays Mortgages, said: “We are providing greater choice to individual landlord investors across the UK than ever before who are looking to purchase or remortgage rental properties. Barclays also considers both personal and rental income for affordability purposes, helping individuals with a variety of income types to achieve their landlord aspirations.”
It is interesting that many of these rate cuts have been offset by completion fees. We spoke to HMRC and they confirmed that completion fees are an allowable expense for tax purposes provided they relate wholly and exclusively to property let out on a commercial basis. Read Property Income Manuel PIM2066 for further details or call HMRC on 0300 200 3300. As of April this year, only 75% of the interest on your buy-to-let mortgage will be tax deductible, with mortgage interest relief phased out entirely from April 2020. For more information on these changes and what it might mean for you, read our Buy to Win guide.
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