Buy to let landlords 'may find it harder to find discount mortgages'

07 July 2010

Written by Steve Olejnik

As a new study shows that the number of discount mortgages on the market has fallen, buy to let landlords may have more difficulty obtaining cheaper home loans.

Analysis by independent financial research company Defaqto has shown that, although there are more fixed-rate and tracker deals available than three years ago, there are 72 per cent fewer discounted rate products.

David Black, banking specialist at the firm, explained that the reason for the decline of the mortgages was because cheaper home loans tend to be linked to standard variable rates (SVR) and there are now substantial differences in the amount charged by providers.

"Lenders with competitive SVRs have little incentive to offer discounted mortgages because profit margins on their fixed and base rate tracker mortgages are better," he commented.

This comes after recent statistics from the Bank of England showed that home loan borrowing increased by £1.2 billion in May.

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