CHL Mortgages Reduces Buy-to-Let Rates

CHL Mortgages has announced substantial reductions in their interest rates, specifically targeting the buy-to-let market. This change is particularly focused on their CHL 1 product line, designed for those with a clean credit history. It covers standard buy-to-let options as well as specialised types like small houses in multiple occupation (HMO) and multi-unit freehold block (MUFB) properties.

Lower Interest Rates for Lower Loan-to-Value (LTV) Ratios

Under 65% LTV: For a standard buy-to-let property, if you’re borrowing up to 65% of the property’s value, the lowest interest rate now stands at 3.06%, with a 7% product fee. The rate for small HMO/MUFB properties is just a notch higher at 3.08%.

Options for Higher LTVs

Up to 70% LTV: If you’re looking to borrow a bit more, up to 70% of the property’s value, rates start from 3.15% for standard buy-to-let and 3.17% for small HMO/MUFB.
Reaching 75% LTV: For those stretching to 75% LTV, the rates begin at 4.34% for standard buy-to-let and 4.35% for small HMO/MUFB.

Longer-Term Stability with Five-Year Fixed Rates

For those who prefer the stability of longer-term plans, CHL Mortgages has also revised their five-year fixed rates.

At 65% LTV: Starting rates are 4.47% for standard buy-to-let and 4.56% for small HMO/MUFB.
70% LTV Options: Rates begin at 4.52% for standard buy-to-let and 4.59% for small HMO/MUFB.
75% LTV Products: Here, the starting rates are slightly higher at 4.57% for standard buy-to-let and 4.62% for small HMO/MUFB.

Flexibility in Fees

An added perk of the CHL 1 range, which was launched last November, is the flexibility it offers in product fees. Borrowers can choose from 2%, 5%, or 7% fee options, allowing for a more tailored approach to financing.

A Positive Shift in the Market

Ross Turrell, the Commercial Director at CHL Mortgages, has highlighted these changes as a welcome relief for the buy-to-let sector, which has been under pressure. He points out that improvements in five-year swap rates and global inflation forecasts have enabled these rate reductions. Additionally, a steady increase in rents is expected to bring more balance to affordability calculations, making this an opportune time for investors in the buy-to-let market.