Rates On Buy-To-Let Mortgages To Rise

A report published by Mortgages for Business has warned that comments from central bankers about improvements in the economy have sufficiently impacted the money markets to cause a rise in the rates offered to landlords.

It said, “In what may turn out to be the most significant change for many months, the steady drop in rates appears to have halted and five year fixed rates are now around 0.2pc higher than they were at the end of May.”

Fixed rate mortgage pricing is commonly seen to be influenced by swap rate markets, which had, up until several months ago, been falling for years. A consequence of the recent rise in five year swaps is expected to be a rise in the rates payable on five year fixed rate mortgages.

Although the relationship between fixed rates and swap rates is not as strong as it used to be due to the Funding for Lending Scheme, which allows lenders to access loans from the Bank of England at rates as low as 0.25%, Mortgages for Business insist that it is still strong enough to result in a rise in the coming months.

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