'Use base rate cut to pay off loans sooner' - buy to let mortgages

13 November 2008

People with buy to let mortgages should use the recent base rate cut to help them pay off their loans sooner, it has been suggested.

The "historic" decision by the Bank of England to reduce interest rates by two per cent over the past eight weeks means that monthly payments may be lowered "dramatically" for many borrowers, according to advisory firm John Charcol.

By maintaining repayments at their pre-cut level, some people may be able to pay off their mortgages six years earlier than expected, the company claimed.

Director Drew Wotherspoon said: "As interest rates fall, it provides the perfect opportunity for borrowers with trackers to pay their mortgage back quicker … taking six years off your mortgage is something we would all like to do."

Meanwhile, the Financial Services Authority has announced it has arranged a hearing to discuss details of the proposed merger between mortgage lenders Cheshire Building Society and Nationwide.