Rate cuts from buy to let lenders as competition heats up

As 2024 begins, the mortgage market is witnessing a promising start, with two prominent lenders, Landbay and Paragon Bank, announcing substantial rate cuts on their five-year fixed-rate buy to let mortgages.

These changes aim to provide landlords with more attractive financing options, setting a positive tone for the year ahead.

Landbay makes competitive rate cuts

Landbay, a leading buy to let lender, has made a bold statement by reducing its 5-year fixed rate mortgages by a noteworthy 46 basis points.

The revamped product range now offers diverse options, starting at 4.39 per cent for a mortgage with a 6 per cent fee and a 55 per cent loan-to-value ratio.

Another attractive option is available at 4.99 per cent, featuring a lower 3 per cent fee.

For those with a 75 per cent loan-to-value, Landbay presents a 5-year fixed rate at 5.09 per cent with a 3 per cent fee and a competitive 4.49 per cent option with a 6 per cent fee.

Rob Stanton, the sales and distribution director at Landbay, talks on what these rate cuts mean for Landbay:

In truth, we start the year as we mean to go on – identifying opportunities in the market to make our range as competitive as possible for our broker partners and their landlord clients.

As landlords continue to navigate the market, it’s really important that we offer a diverse range of products to suit landlords of all sizes and appetites.

Our research suggests that five-year products remain a key choice for landlords moving forward, both in terms of affordability and in certainty of costs.

Whilst some investors prefer to keep upfront costs low, meaning higher percentage fees may not work for them, many borrowers will use the exceptionally low rate to achieve a larger loan amount. It may also be possible to add the fee to the loan, to mitigate the upfront cost, albeit the overall loan will be greater.

Paragon front of the pack with rate cuts

In a similar move, Paragon Bank has also taken substantial steps to enhance its 5-year fixed rate buy to let mortgages, reducing rates by up to 70 basis points.

Notably, rates on Paragon's 5-year fix, accompanied by a 5% fee, have seen a considerable drop from 5.20 per cent to 4.50 per cent. Energy-efficient homes with an EPC rating of at least C can benefit from an even lower rate of 4.45 per cent.

There are new deals for Houses in Multiple Occupation (HMOs) and Multi-unit Freehold Blocks (MUFBs) that start at 4.70 per cent.

Louisa Sedgwick, Commercial Director at Paragon Bank, comments on Paragon’s commitment to remaining competitive:

It’s great to get the year off to a positive start by taking up to 70bps off our 75 per cent LTV five-year fixed-rate mortgages. With a mix of 5 per cent and nil fee options, some with £750 cashback, we’re aiming to offer products that work for more landlords.

These rate cuts from Landbay and Paragon Bank signal a positive trend in the mortgage market, providing landlords with the lower rates they have been looking for.

As the year unfolds, these moves and stability in the Base Rate are likely to influence other lenders, potentially leading to a more competitive landscape for property finance.

If any of these products are of interest, the team at Commercial Trust can help you apply, contact us here to enquire, or live chat or call us on the number above.