Buy-To-Let Mortgage Rates
Buy-To-Let-Mortgage-Rates | Looking Beyond The Headline Rate
Shopping around for buy-to-let-mortgage-rates is not simply a matter of accepting lenders' headline interest rates. Like most other mortgage rates, buy-to-let-mortgage-rates need to be seen in the context of the overall cost of the mortgage to the landlord. This means looking at other factors besides buy-to-let-mortgage-rates.
In addition to buy-to-let-mortgage-rates it is worth looking at the up front fees that are charged by some lenders, as these can be quite steep. As with other mortgages, the fees can make appealing rates suddenly look much less attractive. Some mortgage lenders charge up to £1,800 for arranging the mortgage, though fees around the £900 to £1,200 mark are more usual. There may also be product fees, booking fees and other fees to be added on to buy-to-let-mortgage-rates.
Some lenders charge fees as a set percentage of the loan. Again, this means that the headline rates may not be strictly accurate when calculating the overall cost of a BTL mortgage deal. A fee of one or two per cent might not sound like a lot, but it can add up to a tidy sum if you are borrowing £5 million pounds or more.
BTL Deals
The fee for getting out of a BTL mortgage can be steep as well, making rates less advantageous than the headlines suggest. Exit fees are there to stop people from leaving the mortgage company, so they are meant to be a deterrent and can add significantly to the cost of a mortgage.
Complicating the picture for buy-to-let-mortgage-rates is the BTL mortgage that has a high arrangement fee but a low lifetime interest rate. Set against that are mortgages with low arrangement fees but comparatively high buy-to-let-mortgage-rates. It's worth shopping around to see which combination suits particular landlords best.
Some analysts reckon that the combination of high percentage based arrangement fees and low buy-to-let-mortgage-rates can work well for some landlords, who can count the cost over several years and work out whether this makes the deal better than other market alternatives. It's best to shop around to make sure you can take advantage of the best deals.
In addition to the rates, landlords should also shop around for the best deals on valuations. Some landlords may be able to pick their own surveyor and negotiate a discount on the valuation fee.
Choosing good buy-to-let-mortgage-rates is even more important for the times when the property is untenanted. At these times landlords still have to meet mortgage payments and still have to maintain the property so that it's fit to let, so a good BTL mortgage will ensure that they don't lose too much income while they are getting the next tenant in. This is why it is important to look at all aspects of buy-to-let-mortgage-rates.
