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Category: buy to let mortgages

Landbay, a specialist buy to let lender, has made significant changes to its offerings by reducing rates on its two-year tracker mortgages and expanding its product range. These updates aim to provide greater flexibility and options for landlords in the ever-evolving property market.

The reduction in rates on Landbay's two-year tracker mortgages is one of the key highlights of these updates.

Landbay has lowered rates by up to 90 basis points for standard buy to let properties and by 80 basis points for small houses in multiple occupation (HMOs) or multi-unit freehold blocks (MUFBs) and trading companies.

All of the products in the new range have a maximum loan-to-value (LTV) ratio of 75% and do not impose any early repayment charges. The absence of early repayment charges (ERC’s) means that if you want to switch mortgage rate during the two-year initial period you can, without large penalties.

At a time when the mortgage market is uncertain, this may be a useful feature for investors currently drawn to tracker rates.

Expanding Landbay's offering, the lender has also launched a range of two-year fixed-rate remortgage products, for like-for-like borrowing. These products come with a lower interest cover ratio stress tests, which enables landlords to borrow more than they might have been able to with other more highly stressed mortgage products.

Paul Brett, the managing director of intermediaries at Landbay, commented on the appeal of the new two-year term mortgages. He emphasized that these products are popular among landlords who want the flexibility to reassess their situation in the near term. He says:

With the option to switch to a lower rate without incurring early repayment charges if the base rate decreases, Landbay's tracker products offer landlords peace of mind and the ability to adapt to changing market conditions.

This move illustrates Landbay's commitment to offering competitive rates and catering to a wide range of property types. However, think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage.

Choosing a mortgage to mitigate risk of rates increases

As things stand, the mortgage industry is widely expecting rates to remain high for the foreseeable, and there may yet be another increase to the Bank of England Base Rate.

In those circumstances, landlords are likely to benefit from a fixed rate more than a tracker, which would protect them from further mortgage interest rate rises, where a tracker would increase in line with any further upward movement in the Base Rate.

However, with the option to switch without paying early repayment charges Landbay are offering middle ground. The risk though is that if you do not fix now, whilst you could switch to a fixed rate later, the expectation is that the fixed rates available down the line will be higher than they are at present.

If you are three to six months away from your renewal date, and want to lock in a fixed rate now, you can do so, as mortgage offers come with long expiry dates of this length. This would allow you to secure a deal, and continue to monitor marketplace fluctuations ahead of your actual renewal date, should you wish to.

Whatever you decide, the team at Commercial Trust are here to help, call on the number at the top of this page or request a call-back here.