Landlord Basics

Can Mix And Match Mortgage Help Property Owners?

With many property advisors conflicted about whether or not interest rates will remain stable or rise in the coming year, it is not that surprising that homeowners are finding themselves unsure on how to approach the property market.

Luckily the introduction of ‘mix and match’ deals by lenders could enable property owners to climb back onto the property ladder and benefit from a fixed and a tracker deal all at the same time.

But the question still remains – are they of benefit to property owners?

Pros

• Finances are protected – should interest rates rise, at least half of their mortgage will remain fixed, whilst should interest rates remain low, their tracker deal will enable them to benefit from smaller monthly repayments.
• Benefit from different terms and conditions on both mortgages -  for instance, should homeowners find themselves in a position to pay off more of their mortgage, their fixed will allow them to pay off a certain amount without incurring penalties, whilst their tracker will enable them to repay as much as they want all year round.
• Will receive extra benefits – free payment holidays when finances are tight.

Cons

• Will have to pay 2 sets of arrangement fees – even though many banks have claimed that property owners can avoid this by combining one of four fix rate deals (fees normally £199 to £999) with a fee free lifetime tracker; not everyone can qualify for fee-free offers meaning they will have to pay an arrangement fee of at least £499.
• Arrangement fees are expensive – many lenders are purposely making their fees for these types of mortgages expensive and are charging full set up fees.
• There are no guarantees over rates – lenders do not have to offer you the best of both so whilst property owners may be able to benefit from the best fixed deal this does not mean they will also get the best tracker.

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4. Exclusive Buy To Let Deals
5. Are There Clauses Hiding Away Within Your Mortgage?

Tags: property advisors, property ladder, property market, property owners

This entry was posted on Tuesday, July 27th, 2010 at 7:46 am and is filed under News, mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.