Fixed rate mortgage loans a better option for landlords

Many real estate specialists in Britain believe that the residential property market is well on the road to recovery and considering that the last major crisis took place some twenty years ago, during the early 1990s, investors looking to purchase houses or flats can expect more than a decade of relative growth. Additionally, the number of tenants looking to rent homes in the UK remains high, especially as it becomes more common to live in a rental property for an extended period of time, making the buy-to-let sector an especially inviting investment opportunity.

But one of the best ways to ensure success as a new residential landlord or buy-to-let investor is to apply for a fixed-rate loan, as interests still remain low. This is a particularly good option for those landlords or investors who have enough money to put down the relatively large deposits required for the best deals. For example, landlords who are able to put down a 40% deposit on their new property can enjoy an initial interest rate of 2.99%, if they receive a loan from the Mortgage Works. This rate will remain in effect until May 2011, after which landlords with these buy-to-let loans would pay approximately 4.99%.

An analysis in The Press and Journal noted that the Bank of China offers British buy-to-let investors loans amounting to 65% of their property’s value, at a tracker rate of 3.88%. Landlords should, however, keep in mind that the Bank of China does charge a special arrangement fee, on top of the interest.