Landlords, don’t be fooled by low rates.

The Financial Conduct Authority’s report into the mortgage market found that around 34% of borrowers were unable to see that they were eligible for a cheaper deal.

On average, these consumers paid around £550 per year more over the introductory period compared to the cheaper product. But this poses a question: is the cheapest mortgage always the right mortgage?

With price comparison websites now well-established, some consumers have started to make important financial decisions based solely on price.

But while a decision between two retailers selling the same model of toaster, for example, is simple, such choices are far more difficult when it comes to the world of financial products. The cheapest insurance deals do not necessarily offer the best levels of cover, and the lowest mortgage rates may not be the best deal for a borrower’s circumstances

The mortgage market is both complex and diverse. While high street lenders may have the largest profiles, there is a raft of small and specialist lenders fighting for business.

Landlords look to fix for longer

An increasing number of landlords are choosing five-year fixed rate products, according to the latest research.

In fact, 84% of landlords opted for these mortgages in Q4 2018, up from 70% in the previous quarter. In total, 97% now choose a fixed rate.

The popularity of five-year fixed rates is likely linked to less stringent tests and the promise of greater stability in the uncertain economic climate, the firm says.

Whilst for landlords, the preference for five-year rates is both a protective measure and an opportunity to maximise borrowing, from a market perspective, it will reduce the volume of re-mortgaging over the next few years.

Elsewhere in the sector, more than half (55%) of all newly submitted buy-to-let applications are from landlords using limited companies, up from 44% in Q3 2018 – indicating a shift away from borrowing personally.

Landlords get your mortgage right in 2019 and save thousands

Look into re-mortgaging up to six months before your initial term ends

When the initial term of a mortgage ends, lenders transfer customers onto their Standard Variable Rate (SVR). This typically has a much higher rate of interest, meaning homeowners can be stung by up to an extra £4,000 a year.

There are already over one million landlords languishing on SVRs and paying over the odds, so make sure you don’t get caught out.

Set a reminder to look into your re-mortgage options with a broker three to six months before your initial term ends. Just one month on your lender’s SVR can cost you hundreds of pounds in extra interest.

Buy-to-let investors on the increase again

This is still a growth area for investors as more people see the buy-to-let market as a sound option for the future. Traditional forms of investment such as banks and building societies are still producing poor returns so investors are looking elsewhere.

The house rental market in the UK is very buoyant as people trying to get onto the property ladder find it more difficult due to rising house prices. The demand for good rental property has increased over the last 12 months and would seem to be continuing.

Experts expected the buy-to-let market to decrease and it did after all the new regulations were announced but that trend has now been reversed.