Availability of cheap buy-to-let mortgages soarsHundreds of five-year deals offer rates below 5%

28 May 2015

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Would-be landlords are more spoilt for choice than ever before, as banks continue to cut buy-to-let mortgage rates and boost the number of cheap deals.

In the past two years, rates for fixed buy-to-let deals have fallen from 4.45% to 3.87% on average, according to data provider Moneyfacts. 

Moneyfacts data suggests that the number of five-year deals with rates below 5% is at its highest ever level - there were 143 such deals on offer in May, up from 55 last year.

Find out more: Buy-to-let mortgages - learn how to get the best deal

Buy-to-let mortgage price war 

The best rate available for a five-year fixed deal is from Santander, formerly known as Abbey – at 3.29% (APR 4.6%) with a fee of 2.5% of the amount borrowed, although it is only available through intermediaries. 

According to the Which? Money Compare tables, the best deal available direct from a provider for a five-year fixed-rate buy-to-let mortgage is from NatWest, which offers 3.99% (4.4% APR) with a £1,995 arrangement fee.  

NatWest also offers a two-year fixed deal at 2.24% (APR 4.5%) for those with a 40% deposit or 2.49% (APR 4.3%), for those with a 25% deposit. Both mortgages come with a £1,995 arrangement fee.

Which? Mortgage Advisers searches thousands of mortgages to find the best deal for you.

Find out more: Which? Mortgage Advisers - get independent, unbiased advice about your mortgage

Demand for buy-to-let mortgages expected to soar further

Interest in buy-to-let is expected to soar thanks to pension reforms that allow over-55s to access more of their savings.

Most lenders, however, impose age limits on lending – some as low as 65 when the mortgage deal ends.

If you’re interested in using pension funds to invest in buy to let, see our guide on withdrawing a lump from your pension.

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Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Your home may be repossessed if you do not keep up repayments on your mortgage.