Rates War! Mortgage lenders slash BTL borrowing costs

A series of lenders have slashed their buy to let mortgage rates in a bid to win business.

These include:

- LendInvest Mortgages has reduced its buy to let rates by up to 0.80 per cent. Along with specialist support for complex BTLs with up to £1.5m loans for large HMOs and Multi-Unit Freehold Blocks, the lenders says it aims to offer specialist support for portfolio and limited company landlords.

- CHL Mortgages has lowered fixed rates on its CHL 1 BTL product range by up to 0.65 per cent. The product, launched last November, is for customers (individual and company) with a clean credit history and consists of standard BTL and Small HMO/MUFB product types.

- Kensington Mortgages says all its residential and buy to let mortgages, including limited company products, will include a minimum £250 cashback until the end of January. In addition, Kensington is lowering selected residential rates by up to 0.75 per cent.

- Foundation Home Loans has launched a limited edition five-year fixed rate product. Available for both purchase and remortgage purposes, the BTL fixed rate comes with a headline rate of 5.64 per cent up to 75 per cent loan-to-value and a 1.50 per cent fee. This follows the December repricing of selected products across its BTL range with rate reductions of up to 0.20 per cent.

- Shawbrook has expanded its BTL offering with a new, limited edition five-year fixed rate product, available on loans from £150,000 to £25m, featuring a 0.50 per cent reduction on the standard five-year fixed product up to 75 per cent LTV, with rates starting from 6.09 per cent.

"The mortgage market may be heating up, but this won't fully ease the pain for the roughly 1.6 million existing borrowers with cheap fixed rate deals expiring this year. They still face a heavy jump in interest payments when they switch onto a new product, with the only comfort that the situation could have been much worse" cautions Alice Haine, an analyst at Bestinvest.

Rate reductions by lenders in the BTL and home ownership sectors have fed through to the average rates, as calculated by independent mortgage market monitor Moneyfacts, which says the average two-year fixed rate and five-year fixed rate are at their lowest levels since June 2023.

Richard Fearon, chief executive at Leeds Building Society, told the BBC over the weekend: "This mortgage price war has become very visible this week. There is always a Christmas slowdown, but we've seen the market come back with a bang and it's really competitive. Rates are down one percentage point or so since their peak."