Buy to let mortgage rates are falling: could you be a landlord in 2020?
Buy to let mortgage rates dropped between September and December, with 2020 likely to see further great deals for buy-to-let investments
For those looking to take out their first buy-to-let mortgage and for existing landlords looking to remortgage will find themselves in an exciting environment this year, as lenders compete for business for a reduced number of applicants. The very best rates for buy-to-let mortgages are currently to be had within the two-year and five-year fixed rate deals with at least a 50-per-cent LTV (loan-to-value) ratio, but rates are falling across the board.
The buy-to-let mortgage rates starting at an incredibly low rate of just 1.74 per cent on 75 LTV purchases, as well as £250 cashback. Landlords looking to make improvements to their buy-to-let properties in order to make the new mandatory energy efficiency standards will no doubt welcome this extra cash. Under new EPC rules, a property has to have an energy efficiency rating of at least an ‘E’ to be considered suitable for renting.
So, is taking out a buy-to-let mortgage still a good idea in 2020? Absolutely, and as the number of people renting is only going to increase, buy-to-let is always going to be a worthwhile investment. And while the old tax relief rules are being phased out this year, the changes will have a significant effect only on those in higher tax brackets (40–45 per cent), with those letting out one or two properties unlikely to see any significant changes to their outgoings. The new rules have been introduced to try and curb the amount of tax relief claimed by the highest-earning landlords (think people with huge property portfolios). Any changes in the amount of tax paid by regular landlords should be offset by remortgaging to a lower fixed rate.
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Article courtesy of RealHomes.