Anyone watching the buy to let and commercial mortgage market this summer could be forgiven for feeling dizzy. Mortgage pricing has continued to move throughout the summer, with lenders reducing and increasing rates in quick succession. While that can make planning more difficult, it doesn’t mean landlords should delay important decisions. Understanding what’s driving these changes can help you make the most of the opportunities available today.Why are mortgage rates still changing?When swap rates ease, as they have at points this year, lenders have room to reprice downwards. Several have done so, with some two-year fixed deals at 75% loan to value sitting close to 4%, alongside fee-free options and cashback incentives designed to attract borrowers.But swap rates are sensitive to geopolitical tension, global conflict risk, and shifting expectations about the pace of future rate cuts. That’s why the same market can look generous one month and more cautious the next.For the very latest updates on this front, Donald Trump has claimed that peace talks with the Iranian government will soon be renewed. Iran says that negotiations are happening with Oman to open the Strait of Hormuz for selected commercial shipping, albeit temporarily.While the markets have been burned before by unfulfilled hopes of an end to the Iran war, there have already been reports of oil prices and swap rates going down, which borrowers can be cautiously optimistic about.Should landlords wait?When rates fluctuate, it’s understandable to feel some sense of powerlessness, especially as the current geopolitical situation is so far beyond any ordinary individual’s control. There may be a temptation to sit on a standard variable rate and watch the market for a while longer, especially for those coming to the end of a fixed term.However, our advice has not changed. When markets look unstable, a strong course of action is to lock in a competitive mortgage product that is currently available, rather than waiting around for a hypothetical lower rate that may never come.Most lenders now let borrowers reserve a rate months ahead of completion, in some cases up to six, and many will let you switch down to a cheaper rate if one appears before you complete, often at no extra cost. That means you don’t have to choose between protection and flexibility. You can secure today’s rate as a floor against any increase, while keeping the door open to something better.Our latest Buy to Let Mortgage Index suggests landlords are already taking this approach. Purchase applications represented a smaller share of all mortgage applications in Q2 than a year earlier, while the average purchase loan increased, indicating investors are becoming more selective about where and how they invest.A broader lending marketIt’s also worth noting the market is broadening, not just repricing. Semi-commercial and mixed-use lending is on course to pass £1bn for the first time this year, with more lenders and more products than at any point since we started tracking it, and criteria across commercial lending generally is loosening as competition intensifies.Volatility is unsettling, but for landlords prepared to act rather than wait, it’s currently working in their favour. If you’re approaching a renewal, or simply reviewing your portfolio’s finances, now is a good time to speak to a specialist adviser and understand the options available, rather than letting short-term market movements dictate your decisions.
Anyone watching the buy to let and commercial mortgage market this summer could be forgiven for feeling dizzy. Mortgage pricing has continued to move throughout the summer, with lenders reducing and increasing rates in quick succession. While that can make planning more difficult, it doesn’t mean landlords should delay important decisions. Understanding what’s driving these changes can help you make the most of the opportunities available today.Why are mortgage rates still changing?When swap rates ease, as they have at points this year, lenders have room to reprice downwards. Several have done so, with some two-year fixed deals at 75% loan to value sitting close to 4%, alongside fee-free options and cashback incentives designed to attract borrowers.But swap rates are sensitive to geopolitical tension, global conflict risk, and shifting expectations about the pace of future rate cuts. That’s why the same market can look generous one month and more cautious the next.For the very latest updates on this front, Donald Trump has claimed that peace talks with the Iranian government will soon be renewed. Iran says that negotiations are happening with Oman to open the Strait of Hormuz for selected commercial shipping, albeit temporarily.While the markets have been burned before by unfulfilled hopes of an end to the Iran war, there have already been reports of oil prices and swap rates going down, which borrowers can be cautiously optimistic about.Should landlords wait?When rates fluctuate, it’s understandable to feel some sense of powerlessness, especially as the current geopolitical situation is so far beyond any ordinary individual’s control. There may be a temptation to sit on a standard variable rate and watch the market for a while longer, especially for those coming to the end of a fixed term.However, our advice has not changed. When markets look unstable, a strong course of action is to lock in a competitive mortgage product that is currently available, rather than waiting around for a hypothetical lower rate that may never come.Most lenders now let borrowers reserve a rate months ahead of completion, in some cases up to six, and many will let you switch down to a cheaper rate if one appears before you complete, often at no extra cost. That means you don’t have to choose between protection and flexibility. You can secure today’s rate as a floor against any increase, while keeping the door open to something better.Our latest Buy to Let Mortgage Index suggests landlords are already taking this approach. Purchase applications represented a smaller share of all mortgage applications in Q2 than a year earlier, while the average purchase loan increased, indicating investors are becoming more selective about where and how they invest.A broader lending marketIt’s also worth noting the market is broadening, not just repricing. Semi-commercial and mixed-use lending is on course to pass £1bn for the first time this year, with more lenders and more products than at any point since we started tracking it, and criteria across commercial lending generally is loosening as competition intensifies.Volatility is unsettling, but for landlords prepared to act rather than wait, it’s currently working in their favour. If you’re approaching a renewal, or simply reviewing your portfolio’s finances, now is a good time to speak to a specialist adviser and understand the options available, rather than letting short-term market movements dictate your decisions.
Anyone watching the buy to let and commercial mortgage market this summer could be forgiven for feeling dizzy. Mortgage pricing has continued to move throughout the summer, with lenders reducing and increasing rates in quick succession. While that can make planning more difficult, it doesn’t mean landlords should delay important decisions. Understanding what’s driving these changes can help you make the most of the opportunities available today.Why are mortgage rates still changing?When swap rates ease, as they have at points this year, lenders have room to reprice downwards. Several have done so, with some two-year fixed deals at 75% loan to value sitting close to 4%, alongside fee-free options and cashback incentives designed to attract borrowers.But swap rates are sensitive to geopolitical tension, global conflict risk, and shifting expectations about the pace of future rate cuts. That’s why the same market can look generous one month and more cautious the next.For the very latest updates on this front, Donald Trump has claimed that peace talks with the Iranian government will soon be renewed. Iran says that negotiations are happening with Oman to open the Strait of Hormuz for selected commercial shipping, albeit temporarily.While the markets have been burned before by unfulfilled hopes of an end to the Iran war, there have already been reports of oil prices and swap rates going down, which borrowers can be cautiously optimistic about.Should landlords wait?When rates fluctuate, it’s understandable to feel some sense of powerlessness, especially as the current geopolitical situation is so far beyond any ordinary individual’s control. There may be a temptation to sit on a standard variable rate and watch the market for a while longer, especially for those coming to the end of a fixed term.However, our advice has not changed. When markets look unstable, a strong course of action is to lock in a competitive mortgage product that is currently available, rather than waiting around for a hypothetical lower rate that may never come.Most lenders now let borrowers reserve a rate months ahead of completion, in some cases up to six, and many will let you switch down to a cheaper rate if one appears before you complete, often at no extra cost. That means you don’t have to choose between protection and flexibility. You can secure today’s rate as a floor against any increase, while keeping the door open to something better.Our latest Buy to Let Mortgage Index suggests landlords are already taking this approach. Purchase applications represented a smaller share of all mortgage applications in Q2 than a year earlier, while the average purchase loan increased, indicating investors are becoming more selective about where and how they invest.A broader lending marketIt’s also worth noting the market is broadening, not just repricing. Semi-commercial and mixed-use lending is on course to pass £1bn for the first time this year, with more lenders and more products than at any point since we started tracking it, and criteria across commercial lending generally is loosening as competition intensifies.Volatility is unsettling, but for landlords prepared to act rather than wait, it’s currently working in their favour. If you’re approaching a renewal, or simply reviewing your portfolio’s finances, now is a good time to speak to a specialist adviser and understand the options available, rather than letting short-term market movements dictate your decisions.
