Interest-only mortgages 'good for landlords'
Published: 05-Sep-2007
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Landlords can consider using interest-only mortgages to allow them to minimise their costs, an industry expert has explained.
Recent figures from the Council of Mortgage Lenders (CML) show that 171,800 new buy-to-let mortgages - worth a total of £21.2 billion - were taken out in the first half of 2007.
Now, a CML spokesperson, Bernard Clarke, has explained that landlords should think about interest-only mortgages when expanding their portfolio as they let them keep their costs low.
"One of the benefits of having an interest-only mortgage is if you don't want to pay off the capital it reduces your borrowing costs," he added.
"It's clearly an option for buy-to-let investors who usually want to minimise their borrowing costs and are not interested in acquiring ownership of the property outright."
Recent figures from Paragon showed that the private rental sector in the UK is still robust. According to the research, landlords expect to increase the number of properties in their portfolios over the coming months.
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