Property investors looking for funding face a baffling array of mortgage deals with very little to separate rivals from each other.
Around 700 buy to let mortgages are available direct from lenders or via brokers.
Two-year fixed rate buy to let mortgages take up 54% of all loans offered to landlords, followed by around 20% which are five-year fixed rates and then about 17% are three-year fixed rate loans.
That leaves just about 10% of the market to trackers, standard variable rates another mortgage packages.
The figures come from the latest market survey by broker Mortgages for Business.
The Mortgage Works (TMW) is increasing its maximum loan-to-value (LTV) for first-time landlords from 75% to 80% starting at an interest rate of 4.14%.
TMW managing director Henry Jordan said: “This move offers another option for those looking to invest in buy-to-let for the first time, further demonstrating TMW’s leadership and commitment to the buy-to-let market.
“With the majority of lenders capping LTV at 75%, this is a positive change that is likely to be welcomed by both intermediaries and buy-to-let customers.”
Earlier this year, the Financial Conduct Authority (FCA) frowned on lenders offering these mortgages, claiming first-time buyers could circumvent mortgage affordability tests by taking out a buy to let mortgage and then living in the home.
Since then, the FCA has relaxed opposition to ‘gaming’, the industry term for taking a mortgage out to avoid stringent lending rules.
One reason could be lenders have agreed behind-the-scenes to carry out electoral role checks within a year of issuing buy to let loans to first time borrowers to make sure they are living in the homes.
Buy to let mortgage lender Paragon has announced a return to the second charge market under the banner of Paragon personal Finance. The company will consider loans between £10,000 and £100,000 from an interest rate of 5.436% at up to 85 % loan to value.