Mortgage rates have been at an all-time historic low for a long time now, which has been great for everyone, landlords included, but there are now ominous rumbles on the horizon pointing towards an increase in interest rates from all of the main high street lenders, despite the fact the Bank of England continues to maintain its base rate at 0.5%.
If the thought of expanding your property portfolio is tempting at the moment, which is likely given the recent boom in the buy to let market, and you are still thinking about applying for a buy to let mortgage, you should consider biting the bullet sooner rather than later. The word on the high street is that the Halifax is planning on raising its standard variable rate on May 1st. Once this happens, the other big lenders will undoubtedly follow suit shortly afterwards, so if you leave it for another few months, you may find that your repayments increase by a fairly hefty amount, which is never good news.
However, despite the impending rise in mortgage interest rates, the property market is still in the doldrums and property is becoming increasingly affordable. This is obviously helpful for first time buyers as they have been priced out of the market in recent years, but it is also good news for landlords as it means cheap property is more widely available in many areas of the country.
But before you apply for a new buy to let mortgage, do your math—if mortgage rates DO rise as predicted, do not want to take the risk of ending up in mortgage arrears should you be left with no tenants for any length of time.
