Average fixed rates drop below variable rates

An interesting feature of the buy-to-let mortgage market recently has been the continuing downward pressure on fixed rates. According to the Profile, for mortgage offers processed by Property Hawk Mortgages in Q1 2013, the average fixed rate was 4.48% compared with 4.67% in the previous quarter. This reflects the continuing economic issues in Europe, the impact of UK fiscal measures and falling swap rates over the last year.

This trend in pricing has meant that fixed rates and variable rates have been moving closer together over the last 12 months, and for the first time the average fixed rate (for offers received in Q1 2013) dipped below the average variable rate.


Increased competition has also influenced product design and some lenders are offering low headline rates aimed at specific segments of the market in order to attract new business and reach lending targets.

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