Insurance News Archive
Buy to let property insurance: The return of capped mortgages
More lenders are set to resume offering capped mortgages as it becomes increasingly likely that interest rates will rise, which may interest landlords and buy to let property insurance policyholders.
Many UK lenders stopped offering the deals, which allow borrowers to repay their mortgage at a variable rate up to a fixed limit, when interest rates fell sharply during the recession.
Some finance providers are beginning to offer capped mortgages again, however, with Coventry Building Society allowing a deal at a maximum loan-to-value of 65 per cent, with a current rate of 2.99 per cent and a cap at 3.99 per cent.
Ben Wilkie, editor of What Mortgage, suggested that, although the mortgages will "never be the cheapest deals", they can offer borrowers the peace of mind that their rate will not rise significantly.
"They were a popular deal so they certainly will have a place in the market. I think that once people start to think that interest rates will go up, they will become more popular," he added.
Posted by Jonathan Walker
03 Aug 2010
