Cheapest buy-to-let mortgages marginally more expensive than residential rates

by Aaron Strutt

Jan 20 2020

The margin between the cheapest buy-to-let and residential mortgages is reducing as the lenders continue to tempt landlords to purchase more properties or remortgage. 

Trinity Financial has access to Barclays for Intermediaries sub-1.4% two-year fix and Virgin Money’s sub-1.9% five-year fix.

The Barclays rate has a £1,795 arrangement fee and Virgin’s fix has a £1,995 fee. Landlords will need a 40% deposit to qualify for these buy-to-let mortgages.

Aaron Strutt, product director at Trinity Financial, says: “To attract more buy-to-let business the lenders have been lowering rates and improving acceptance criteria.

“The gap between the cheapest residential two-year fix and the best buy-to-let two-year fix is down to 0.16%, and it is likely to get smaller over the next few months. While buy-to-let purchase activity has reduced, the remortgage market has been strong as landlords lock into the super-cheap deals.”

How much does it cost to remortgage?

Most of the lenders provide a free property valuation and legal service when you switch to them, but you will typically have to pay an arrangement fee to access to cheapest deals.

How long does it take?

More of the lenders are providing fast mortgage offers so it can be a very quick process to remortgage. The legal process normally takes a few weeks. 

Can I use my employed income to get a larger buy-to-let mortgage?

Trinity has access to at least 25 mortgage lenders accepting landlords personal income on top of the rent, enabling them to secure larger buy-to-let mortgages.

Many of the banks and building societies have tightened their rental calculations making it harder to secure sufficient buy-to-let mortgages. 'Top-slicing' (the industry term) enables many landlords to purchase or remortgage a property when the rental income is not enough, but they have salaried or self-employed income.

If you are looking to purchase a property and turn your existing home into a buy-to-let, it is likely you will need to use your personal income for the buy-to-let application unless you have a significant deposit.

Trinity's buy-to-let best buy table

Call Trinity Financial on 020 7016 0790 to secure a buy-to-let mortgage