UK buy to let mortgage lenders Accord mortgages and Bank of Ireland have both announced that they will be making some big changes to buy to let products that they currently offer. Specifically, they will both be increasing the rates on their main products, meaning that landlords looking to get a buy to let mortgage with either bank will need to either put down a larger deposit, up the rent that they currently ask from their tenants, or look for another lender with lower rates in order to keep their investment properties profitable.
What Does It Mean When Lenders Make Changes to Buy To Let Loans?
We hear a lot about residential mortgage rates going up in the news and the impact that this will have on home owners, however there is not so much news about landlords and the implications of lenders increasing buy to let rates as much. For most landlords, owning a rental property is an investment of hard earned savings that should provide landlords with a steady and profitable income. For many years, owning an investment property has been a great way to make your money earn you money, but in recent months the profit margins of buy to let properties has restricted significantly.
Rising interest rates and soaring energy and utility bills have meant that many landlords are being left with the tricky dilemma of keeping their properties and raising rent for their loyal tenants, keeping rent at the same level but risk making very little profit income or none at all, or in worst case scenarios having to sell up their properties because it makes no financial sense to keep them.
Accord Mortgages Changes To Buy To Let Rates
Here is the brief update that Accord mortgages forwarded to all brokers recently, explaining what changes would be coming in for their buy to let offerings:
Accord are increasing rates on fixed rate products up to 75% LTV. Changes to 60%, 65% and 75% LTV products are as follows:
- 2 & 3 Year Fixed Rates – increasing by 0.15%
- 5 Year Fixed Rates – increasing by 0.10%
- 80% LTV Fixed Rates and all BBR Trackers are unchanged
Both changes are not huge, however a 0.15% or 0.10% rate increase could see landlords losing out on some significant profit earning if they do not either switch to a better lender/product/rate or increase their rent.
Bank of Ireland Changes To Buy To Let Rates
Bank of Ireland have also similarly announced that they will be making changes to their 60% LTV buy to let offerings, withdrawing several products and replacing them with a yet to be announced (but a presumably higher rate) new product. Here is a breakdown of the products which are being withdrawn and will likely be replaced with higher rates:
- 2-year fixed loan at 60% LTV – 4.45% rate and £1,995 fee
- 5-year fixed loan at 60% LTV – 4.35% rate and £1,995 fee
- 2-year top slicing fixed loan at 60% LTV – 4.52% rate and £1,995 fee
- 5-year top slicing fixed loan at 60% LTV – 4.38% rate and £1,995 fee
What Can I Do About Rising Interest Rates As a Landlord?
The best thing to do if you have investment properties with mortgages is to speak to a specialist buy to let landlord like us at Oportfolio. We have access to over 90 different mortgage lenders and thousands of exclusive mortgage products, and our job is to help you to make sure that your investment property is making you money and is on the best mortgage product possible for your circumstances. Whether that means switching product, switching lender, re-structuring your current mortgage, or getting a completely brand new loan. Whatever route makes the most financial sense, we can help you to secure it. Call our team of buy to let mortgage advisors today to see how we can help.