Property investors who are searching for a cheap buy to let mortgage have warned that fees and charges are going to cancel out low interest rates .
Landlords considering a buy to let property are more so being hit with high fees due to mortgage lenders compensating for low interest rates with higher fees.
Mortgage lenders provide a choice between products with pretty high interest rates and low fees, as well as low interest rates with high fees. Circumstances will dictate what is best for the individual. Nonetheless, it is worth considering the effect a large fee can have on the entire cost of the mortgage .
Buy to let investors can easily be faced with fees nearing £5,000 on their property . If they had a three year fixed rate buy to let mortgage, that would be equivalent to a 0.5% interest rate without the fees.
Standard Life Bank and Abbey have adopted this low rate, high fee approach on buy to let mortgages, with both charging four figure fees on part of their mortgage range.
Northern Rock have a buy to let option with tiered percentage fees as opposed to flat amounts. Their buy to let mortgages have fees between 0.75% and 2.5% given the interest rate on the product. A low rate deal may look good, yet it increases all the time.
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Buy to Let Landlords Get Mortgage Fee Warning
Tue, 13 Feb 2007
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