Fees for buy-to-let reach new low

The flat fees for buy-to-let mortgages are at their lowest point for twelve months, the Buy-to-Let Mortgage Costs index has revealed.

Fees for buy-to-let reach new low

The index published by Mortgages for Business showed the average flat fee among buy-to-let mortgage products fell by more than 5%, down to £1,370 from £1,446 in Q1.

Steve Olejnik, chief operating officer at Mortgages for Business, said: “With interest rates still at exceptional lows, it’s all the more important to make sure you look at any additional charges when taking a buy-to-let mortgage.

“It is promising to see a reduction in the average flat fee charged for mortgage products.”

However, percentage based fees are becoming increasingly common with lenders, likely as a way to keep interest rates low while still allowing profits to scale with larger loans. Percentage-based fees now apply to 48% of buy-to-let mortgage products, having overtaken flat fees on product availability at the start of the year.

Just 11% of buy-to-let mortgage products carried no arrangement fees in Q2, down from 15% in Q1.

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