CML says interest only mortgages ‘can save landlords money’

Opting for an interest-only mortgage is a good financial decision for landlords, an industry body has claimed. Bernard Clarke, a spokesperson for the Council of Mortgage Lenders (CML), said that this type of mortgage gave property investors who rented out properties alternative options for repaying their loans. Research by the CML indicates that 171,800 new buy-to-let mortgages worth £21.2 billion were approved in the first half of 2007.

It also revealed that buy-to-let mortgage lending amounts to ten per cent of mortgage balances, compared to three per cent five years ago. Mr Clarke said: “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 went on to say that it is “clearly an option for buy-to-let investors”, who often did not want ownership of the property outright, as it minimised their borrowing costs.

The CML is the trade association for the mortgage lending industry and its members account for close to 98 per cent of UK residential mortgage lending. Find out more about buy-to-let mortgages Opting for an interest-only mortgage is a good financial decision for landlords, an industry body has claimed.