What’s happening with buy-to-let interest rates?

Posted by Simon Banks, January 18, 2022

What’s happening with buy-to-let interest rates?

What's Happening With Mortgage Interest Rates?

Mortgage interest rates have been historically low for the last decade. But now, many analysts are suggesting that the penny may have finally dropped, and we’re about to enter a period of higher rates. They could be right if December’s small hike is anything to go by. However, it’s hard to predict what happens next. But what we can do is look at the current state of play with mortgage interest rates, how they affect buy-to-let lending and the role Molo has to play. So read on to find out what’s happening with buy-to-let interest rates.

The recent history of interest rates

Why have interest rates increased?

With rates at a historically low level of 0.1%, there was only really one they could go: up. Other factors have also contributed to the recent increase, such as surging inflation. Figures show the Consumer Price Index (CPI) surged by 5.1% in the 12 months to November 2021 – the highest increase in a decade. 

The BOE sets the inflation rates to control the economy. When inflation starts to rise, interest rates are usually one of the first things to increase. And while 0.25% is a minor increase, analysts predict further rises are in store. 

What happens next?

No one can tell for sure what the BOE will do next in terms of raising the interest rates. But with rates so low, it was only a matter of time before they began to rise. Many have predicted several increases throughout 2022, as the UK economy aims to recover from the pandemic. 

This is likely to affect landlords buying a new property or remortgaging than it is borrowers locked into their fixed-term rate. The Office of Budget Responsibility has also predicted that mortgage rates, in general, will increase by 13.1% in 2023. 

Any rise will be dictated by the base rate, however. Still, it’s not stopped investors thinking about their next move in the property market, whether that’s taking advantage of current rates for a new buy-to-let purchase or remortgaging to lock in low rates. 

Buy-to-let interest rates with Molo

At Molo, we’ve recently slashed our interest rates on products including SPV and HMO. The buy-to-let market needs competitive rates to thrive, so investors can feel confident when investing in the market.

Molo price changes:

  • Reduction in rates across our Individual/Limited Company and HMO 5-year fixed-rates 75% LTVs, with rates starting at 2.37%
  • Reduction in rates across our Limited Company and HMO 5-year fixed-rates 65% LTVs, with rates starting at 2.95% 

Final words: interest rates in today’s buy-to-let market

Investors have enjoyed historically low rates for more than a decade now. And while that doesn’t look like it will change dramatically within the next 12 months, interest rates are predicted to go up in 2022. That’s why there’s no better time than the present for investors to start thinking about their next move in the market. 

Recent articles

How long does the interest rate stay the same?
Buying a home

How long does the interest rate stay the same?

When you get a mortgage, you’ll be charged a rate of interest on the loan. This can be fixed for a period of time or change over time, depending on the type of mortgage you choose. Each lender will offer their own rates on their deals, but all rates are influenced by the Bank of …

How long does the interest rate stay the same? Read More »

Posted by Oliver West

April 21, 2022

Limited company buy to let
Buy-to-let

Limited company buy to let

Purchasing property using limited company buy to let Rents are growing at their fastest pace in 13 years and tenant demand is high. According to Zoopla’s latest rental market report, rents rose by 0.3% between October to December 2021. Meanwhile demand from renters rocketed by 76% in the New Year compared to the same period …

Limited company buy to let Read More »

Posted by Simon Banks

April 13, 2022

Fixed rate mortgages UK
Buying a home

Fixed rate mortgages UK

Choosing long-term fixed rate mortgages for lifelong peace of mind In just three months, the Bank of England has increased rates from 0.1% to 0.75% causing variable rate mortgage costs to rise. At a time when the cost of living is rising and energy bills are due to soar again in April homeowners are understandably …

Fixed rate mortgages UK Read More »

Posted by Simon Banks

April 13, 2022