Buy to Let Mortgage Trackers
Buy to Let Mortgage Tracker
When it comes to deciding on what type of buy to let mortgage is right for you, you have a range of options to choose from.
Tracker deals are often described as the most transparent of buy to let mortgage products.
How does a tracker rate buy to let mortgage work?
A tracker rate works by following another rate. It can sometimes track below the rate it is following, but more often than not, it tracks at a percentage above it. A tracker tends to be marketed as ‘base rate plus x per cent’, the x percent being the amount the lender adds on top.
Things you should know about a tracker mortgage
Tracker rate buy to let mortgages can often an attractive deal. However, there are some key considerations you should look at when making your decision. Tracker mortgages often appeal to investors as they can take advantage of:
Low Interest Rates – A tracker mortgage deal can have the potential to offer a very low rate of interest. For instance, if you took out a tracker mortgage at a +1% above the base rate, you would only pay 1.5%. If interest rates remain low, you could benefit from paying less back monthly on your mortgage than you might do with a fixed rate or variable rate buy to let mortgage.
Not being subject to change in your lenders SVR – As a tracker rate is determined by the base rate, you will not be affected by increases in your lenders SVR.
Flexible overpayments – The majority of lenders offering tracker rates will allow borrowers to make penalty-free overpayments on their tracker mortgage. Whilst your tracker rate is low, you can take advantage of it by overpaying on your mortgage and shortening the total length of time it takes to pay back.
Whilst these factors make a tracker buy to let mortgage a lucrative and appealing investment opportunity, there are also other aspects that you should consider when looking to apply for a tracker rate loan.
Early Repayment Fees – If you decide to leave a tracker buy to let mortgage before the end of the set term, you might face early repayment penalty fees.
Security of rate – Although your tracker rate may not be subject to changes in your lenders SVR, it is still has the potential to be skyrocketed should the bank of England’s base rate suddenly increases.
If you would like to compare top buy to let tracker mortgage deals, or would like any advice on whether a tracker rate is for you call us today on 0117 403 4222, or fill in our online contact form to request a call back.