Investment Property Mortgage Rate UK
Investment Property Mortgage Rate UK | Avoiding the Lender Hype!
To get the best of the investment property mortgage rate UK landlords need to understand the different rates available and how these are set. This will mean that when they investigate the investment property mortgage rate UK banks and building societies offer, they will be well informed. Here is some information about the investment mortgage rate UK property investors need to be aware of.
To start with, there is no single rate UK investors can rely on. Instead, in order to se the investment property mortgage rate UK lenders rely on a number of other rates which determine the rate they set themselves. To start with, when setting their investment property mortgage rate UK bankers will look at the base rate set by the Monetary Policy Committee of the Bank of England.
This is a key deciding factor and most other interest rates, whether for mortgages or savings, will rise and fall in line with this rate. What this means is that the investment property mortgage rate UK landlords pay is unlikely to stay the same throughout the term of a mortgage, especially on a variable rate or tracker deal. A tracker BTL mortgage will follow the ups and downs of the Bank of England base rate by a set percentage. This can be as little as 0.2 per cent or as much as 2.5 per cent, depending on the deal.
LIBOR Rate BTL Mortgages
Another figure that affects the rate UK property owners pay is the rate at which banks lend money (US dollars) to each other. The world is a huge financial market, with banks borrowing money from other banks so they can lend it to you. The rate at which they do this is known as the London Interbank Offered Rate (LIBOR). Some BTL mortgage lenders use the LIBOR index as a benchmark for setting the rate UK landlords will have to pay.
Whether they say so or not, most banks will use one or other of these financial measures. In fact, most banks base the investment property mortgage rate UK landlords are offered on the Bank of England base rate. Some banks, such as Barclays, brand their rate (for example, the Barclays Bank base rate), which gives them the freedom to depart from the base rate if they wish. In practice, however, not many lenders do this.
When it comes to the investment property mortgage rate UK landlords need to be aware of the standard variable rate charged by many lenders. In addition, there is often a standard variable buy to let rate which is slightly higher than the standard variable rate. That rate, in turn, is usually higher than the Bank of England base rate. Luckily, there's little reason for most borrowers to pay the standard variable rate. Most lenders have a range of fixed, discounted and tracker BTL mortgage deals, which means that the investment property mortgage rate UK investors pay is the one that suits them best.
