Buy to let mortgage comparison sites should make shopping around for the best landlord loan deal easy – but not every web site offers the cheapest mortgage deals.
The problem for landlords is the search engine that powers the results for the sites.
Some share the same service, while others do not have every lender listed.
It’s the same for landlords who try to source a deal through a broker – the broker may be independent but rather than offering a whole of the market service, belongs to a mortgage club run by a network of brokers or an insurance firm.
So what is the cheapest buy to let mortgage deal – and how do you find it?
First, forget that headline mortgage rate deliberately dangled as a carrot to grab your attention.
Low interest rates can often mask high set-up fees and reversion rates – the interest rate charged when the fixed or tracker deal ends.
For example, the lowest two-year fixed rate is The Mortgage Works 2.49% at 60% loan-to-value.
A £150,000 interest only loan at the maximum LTV costs £311 a month and comes with a £3,750 fee on a buy to let home worth £250,000. That’s a total expense of £11,214 over two years.
But the Leeds Building Society 2.59% fixed over 24 months at the same loan to value costs £324 a month with a £999 fee, which adds up to £8,775 for the same value mortgage on the same value property over the same 24 months.
For landlords wanting to fix, now could be the time to act.
Former deputy governor of the Bank of England Sir John Gieve said: “These are emergency rates of monetary policy. We should be expecting them to normalise them over a period.
“I think there is a good chance that we will see the first rate rise before the end of the year.”