"Fewer landlords are considering five-year fixed rates and more are looking at two-year fixes."
More than three-quarters of landlords expect to opt for a fixed rate deal when it is time to remortgage, however sentiment has shifted on tracker mortgages, new research from Landbay shows.
Almost one in six (17%) of respondents said they would consider a variable tracker rate, while 6% might revert to the standard variable rate (SVR). In Landbay’s previous survey undertaken last August, a month before the mini-Budget, no one said they would take a tracker.
The rise in landlords considering trackers is due to economic uncertainty. Some respondents believe rates will come down in the next year or two so don’t want to commit to a long-term product.
Five-year fixed rates were still the most popular option among landlords with 46% preferring this, but popularity has fallen from 68% in August.
Meanwhile, shorter-term fixes have grown in popularity, with almost a quarter (24%) of landlords eyeing up two or three-year fixed rate terms, compared to 13% in the previous survey.
Popularity in longer-term fixes such as seven or 10-year deals was similar in the two surveys, marginally rising from 7% to 8% of landlords.
Paul Brett, managing director of intermediaries at Landbay, said: “When we talk about this record year of mortgage maturity, much of the conversation is focused on first-time buyers or traditional households. It’s important we remember the many landlords who are set to remortgage too, and judging by our latest data, fixes still look like the preferred product.
“However, it’s interesting to see how landlords’ views of their remortgaging options have changed since September’s mini-Budget. Fewer landlords are considering five-year fixed rates and more are looking at two-year fixes.
“There was a considerable rise in landlords thinking of taking a tracker mortgage, up from zero to 17%. A tracker mortgage is a safer option for some who don’t want to commit to a fixed rate. The advantage with trackers is there are no early repayment charges so borrowers can move to a fixed product if rates come down later in the year.”
