Landlords weigh fixed vs tracker mortgages as rate outlook stays unclear

For landlords nearing the end of their mortgage terms, fixing the rate has become a common choice, offering predictable monthly payments. However, with current economic uncertainty, tracker mortgages may provide a more flexible alternative. The Bank Base Rate stands at 3.75%, and recent fluctuations in Swap rates have driven up some fixed mortgage rates. The Bank of England has also noted uncertainties around inflation, particularly due to rising energy prices.

Tracker mortgages adjust with underlying rates, which can be advantageous for landlords hesitant to lock into higher fixed rates today. Lendco’s tracker products come without early repayment charges, allowing borrowers to switch to a fixed rate when it suits them, subject to criteria. This flexibility is valuable in an unpredictable market where future changes remain uncertain.

Affordability is another key factor. Lendco can consider an Interest Coverage Ratio (ICR) of 110% for pound-for-pound refinances, which can make a significant difference in mortgage feasibility for some landlords. Brokers are encouraged to discuss both fixed and tracker options with their clients, considering individual circumstances, property details, and long-term goals.

Lendco’s Business Development Managers (BDMs) are available to assist brokers in evaluating options and structuring cases. For further assistance, brokers can contact Lendco’s team through their website.