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26/03/2009
Fixed-rate mortgages 'proving more popular with investors' |
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Those investing in buy-to-let property are increasingly turning to fixed-rate mortgage deals to fund their acquisitions, new research has indicated.
A study this week by Legal & General found that the proportion of such investors taking out a fixed-rate deal was 68 per cent in the first quarter of this year, compared with 43 per cent in the final three months of 2008.
This change occurred as the costs of fixed-rate deals increasingly reflected the recent base rate cuts, with the average rate on a two-year deal dropping from 5.9 per cent in the third quarter of last year to 4.78 per cent in the opening months of this year.
Director of housing at Legal & General Stephen Smith observed: "Fixed rates are very much back in favour, partly because lenders have been increasing the margins on their new tracker mortgages."
Those keen to take out a buy-to-let mortgage may wish to take legal advice before proceeding.
Commenting on the cut in fixed rates, Mail Money expert Liz Philips wrote in the Daily Mail that the drop in price for the best two-year deals since last summer would save £280 a month in repayments on a £150,000 mortgage.
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