Buy-to-let mortgage rates have fallen across the board since September as lenders continue to scale back charges on hopes of a lower peak in base interest rates.
Overall, the average two-year fixed buy-to-let mortgage rate has reduced from 6.64% to 6.40% since September, according to Moneyfacts data.
An average five-year fixed mortgage now sits at 6.32%, compared to 6.49% a month ago.
Though both remain higher than averages recorded in October last year, Moneyfacts finance expert Rachel Springall explained the fall marked a reassuring trend for the market.
“These are encouraging signs for landlords looking to refinance who may have been concerned about rates escalating,” she said.
Growth in the number of product offerings is also welcome news, Springall continued, with the 2,581 buy-to-let mortgages currently on the market, compared to 2,475 last month and just 988 in October 2022.
Deals for those able to lay down a 40% deposit are the lowest, with a five-year fix including a rate of 5.70%, alongside 6.09% on two-year fixes.
Rates rise on 20% loan-to-value deals though, to 6.84% on a five-year fix and 6.95% for two years, reflecting previous anticipations on how high the Bank of England could lift the base rate.
“The months ahead for the buy-to-let sector are crucial,” Springall added, pointing to the “enticement” from the growing rental market.
“Providers will need to carefully balance supporting their existing customers and work hard to entice new business.”