Monday, February 14, 2011

Bank takes action on buy-to-let customers | The Post

Permanent TSB has intensified its bid to move its buy-to-let mortgage customers away from interest-only mortgages.

However, it has no plans as yet to incentivise a similar move by owner occupiers. A number of the bank’s existing buy-to-let customers received letters in the last two weeks regarding changed terms for their interest-only mortgages.

Late last year, the bank started this initiative, writing to the owners of thousands of buy-to-let properties to advise them to start paying back the capital on their investment property loans or face losing their tracker-rate mortgages.

‘‘Customers retain their current tracker mortgage rate once they agree to move to interest plus capital repayments or, where they choose to remain on interest-only, they will be charged an extra 1 per cent on their current interest rate," a spokesman for the bank said.

He said that the bank had ‘‘engaged with about 1,000 customers’’ regarding buy-to-let, interest-only mortgages up to now.

The spokesman added that Permanent TSB’s bid to move interest-only investment customers to capital repayments was not affected by recent rate announcements by the bank.

‘‘This approach remains for these customers, regardless of other changes to our variable or fixed rate interest rates in the meantime," he said.

The spokesman also stressed that there were no plans for a similar move for homeowners with an interest-only mortgage.

‘‘Some owner-occupier customers do have interest-only mortgages, and there are no plans to extend this

to these customers," he said.

Last week Permanent TSB announced increases of up to 3pe r cent in its fixed rate for existing customers to whom the bank is obliged to offer a fixed rate. It is no longer offering fixed rates to new customers.

Earlier this month, the bank announced a 1 per cent increase in its variable rates.

Posted via email from quirkeproperty's posterous

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