True to form BTL mortgage lenders have immediately raised their rates to new clients to ‘offset’ the base rate increase, according to a recent study of the fixed rate mortgage rise.

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The broker that undertook the analysis says landlords who are now taking out a standard two-year fixed rate mortgage of £160,000 will have to pay up to £90 per month more including fees. This is compared to December 2021 prior to the Bank of England raising interest rates which included the latest hike to 0.75 per cent in March.

A spokesperson for the broker, said: “As anticipated there have been widespread increases in the cost of fixed rate buy-to-let mortgages as lenders have been quicker this time around to pass on the latest increase in the base rate.

“Interestingly, mortgage costs have risen at a slower rate for landlords borrowing through a limited company, but these mortgages are often more expensive in any case and there are fewer lenders to choose from.”

The study shows the rate for a typical BTL standard variable rate (SVR) mortgage on average now stands at 5.06 per cent.

Monthly repayments for a standard landlord mortgage of £160,000 is now £632 and in some cases nearly £300 more than the lowest fixed rate BTL mortgages.

The broker says that those landlords still on SVRs who anticipated maintaining their property for two years at least must quickly find a far better fixed rate offer.

The spokesman, says: “With further rate rises expected even landlords on a current fixed rate with a limited time left might want to consider a new deal even if it would mean paying an early redemption fee to exit their existing loan.”

The cheapest standard BTL mortgage for a two-year fixed rate for £160,000 with an LTV (Loan To Value) of 60 per cent increased from 2.06 per cent to 2.36 per cent including fees, increases the monthly repayment from £311 to £351 - £40 per month more.

However for those with the more popular five year the increase was lower as for a typical five year fixed rate BTL mortgage of £160,000 with an LTV of 60 per cent, was increased from 2.33 per cent to 2.48 per cent with the monthly repayment rising from £311 to £346 inclusive of fees - £35 per month more.

He continued: “Higher mortgage costs coupled with the scarcity of property is making it difficult for landlords who want to expand their portfolio.

“This is not good news given the current high demand for accommodation and the rise in rents that is happening as a result.”