Getting the best 2 year fixed rate buy to let mortgage
Your BTL mortgage rate fixed for 2 years
Although the buy to let mortgage market has expanded recently to allow you to take out a buy to let mortgage with as little as a 15% deposit, you will find that the best deals that are available as two year fixed rate mortgages are very much restricted to those who have higher deposits. You will find the best deals starting to come in for people with deposits of 25%, but in order to access the full range of mortgage deals you will need up to a 40% deposit.
What’s the biggest difference between the deals for a 25% deposit and a 40% deposit?
The only real difference is the amount of choice you have between products. In terms of the type of products that are available you will find that interest rates are similar, as are arrangement fees. This is all down to the amount of perceived risk each lender has. Some consider a 25% deposit to represent a relatively low risk and so will offer you good interest rates, while others will require up to a 40% deposit to then consider you to be a low enough risk to then allow you to take out one of their products.
When you are looking at different mortgage products you will not only have to look at interest rates, you will also have to look at the product arrangement fees. These can be split down into arrangement and completion fees, but the total fees usually lie between £1000 for the cheapest fees and £2000 for the more expensive fees. Counterintuitively, the amount of fees you pay are not generally related to the amount of deposit you have so make sure you check out all of the options available if you have a smaller deposit as you could potentially get a better deal on a higher interest rate mortgage because of the savings you would make on the product fees.
Finding the best product
Finding the best mortgage product for you is going to take a little time and some effort on your part. The first things you will need to know in order to find the best mortgage for you are the amount of deposit you have and also the approximate amount of loan you are planning to take out. Before you apply for a mortgage you will also need to know where you are planning to buy and obtain evidence from at least two estate agents of the demand and rental amounts you could obtain from the property you are planning on buying. Then, once you have all of this information you will be in a good position to find the right mortgage.