Record low interest rates are being offered to buy to let investors as banks and building societies target low-risk borrowers who are keen to cash-in on the buoyant rental sector.
Competition among banks has driven buy to let interest rates to their lowest level for years.
Some of the best deals include:
- Mortgage Works (Nationwide Building Society): Two year fixed rate at 2.49 per cent (40 per cent deposit required).
- Leeds Building Society: 2.59 per cent (40 per cent deposit), with a fee of £999.
- Santander five year fixed rate: 3.99 per cent (40 per cent deposit).
The average two year fixed rate mortgage (25 per cent deposit) has fallen to 2.37 per cent - the lowest figure since records began. This compares to 3.98 per cent in 2009, when the Bank of England cut the base rate to 0.5 per cent.
The choice of deals for first time buyers with 5 per cent deposits has also increased to the highest level since the financial crisis. According to information firm Moneyfacts, there are presently 157 deals available, compared to just three at the depths of the economic crisis.
Borrowers and lenders alike are keen to know if the Bank of England base rate will be increased. The Bank's Governor Mark Carney said no rate rise will be considered until unemployment drops to 7 per cent. The current rate is 7.1 per cent, so a rate change could happen soon.
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