Interest Rate Cut Yet to Benefit Buy to Let Loans

Mon, 17 Nov 2008

The Bank of England’s recent interest rate cut has yet to be passed on to the owners of buy to let properties, brokers have claimed. The interest rate cut has seen residential fixed rates lowered and tracker rates altered, though the buy to let sector is yet to benefit.

Director of Savills Private Finance, Melanie Bien, has warned that landlords coming to the end of their mortgage contracts and hoping for a lower rate may be disappointed. In the past few weeks, a number of lenders have removed buy to let products from their ranges, and have yet to replace them. However, Ray Boulger, Technical Director of John Charcol, has claimed it is simply a matter of time before deals are launched offering lower interest rates .

As a result of the reduced number of tracker rates, landlords are being forced to consider fixed rate deals . Rates of between 5.5 and 6 per cent are currently the lowest on offer, with varying initial fees. However, significant deposits are required, whilst Natwest’s 5.89 per cent three year fixed rate deal accompanied by a maximum loan to value ratio of 65 per cent.
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