Massive mortgage fees are still being asked of landlords despite the fact there has been a surge in loans being approved.
In the second quarter of 2010 there were 24,900 buy to let mortgages granted, which represents a 13 percent increase on the previous quarter.
However, a deposit of at least 30 percent is being asked for in order to qualify for the best rates.
Market Harborough Building Society is offering a two-year fixed rate at 4.5 percent with a fee of £845 at 70 percent loan-to-value.
This equates to monthly repayments of £834 on a typical £150,000 mortgage.
The Mortgage Works, Clydesdale Bank and Bath Building Society will lend with a 20 percent deposit but there is a high price to pay for this.
The Mortgage Works’ three-year fix is 5.49 percent but with a fee of three percent. This adds up to £3,000 on a mortgage of £150,000, with monthly repayments of £920.
Principality Building Society has a two-year tracker at 3.64 percent, available but only for those with 40 percent equity, which comes with a fee of 3.5 percent.
Melanie Bien of broker Private Finance, told the Daily Mail: “Landlords may be all right on their lender’s standard variable rate at the moment because interest rates are low.
“But there are still very few fixed-rate or tracker deals to move to when interest rates rise, especially if the landlord has less than 25 percent equity.”
Lenders are also increasingly reluctant to agree to a ‘consent to let’, when homeowners rent out their home.
Nationwide recently announced it would impose a 1.5 percent premium on the interest rate.
