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BTL Tracker Mortgages: Report & Review

Normally, in the property business, a deal is a deal. If you bid for a property at auction you pay the price you agree to when the hammer falls. If you let a property, then your tenant expects you to stick to the agreed rent until the end of the tenancy, notwithstanding built-in inflation increments. You wouldn't expect, quite rightly, to be able to renegotiate the price of the property - nor up the rent by several hundred pounds a month during the course of a tenancy - on a technicality.

Unfortunately, however, it seems that the same kind of understanding doesn't apply to some buy to let lenders - or more specifically those offering tracker mortgages linked to the Band of England (BoE) base rate. Back in the years when interest rates looked likely to rise beyond 5% or so, many lenders were keen to promote tracker mortgages as a prudent way to borrow - and offer attractive rates only marginally above the BoE base rate. Now that base rate seems anchored to the floor for a little while yet, added to the rising costs of borrowing for lenders themselves, it seems that some tracker mortgages aren't quite such a good idea - for the lenders at least.

Bank of Ireland became the first lender to adjust the goalposts, allegedly, back at the start of 2013. The lender increased its tracker mortgage margin for 13,500 borrowers - from base rate plus 1.75% to base rate plus 4.49% in the case of buy to let mortgages.

The latest lender to move is West Bromwich Building Society. The society has told 6,700 multiple-portfolio borrowers of its former specialist BTL lending division, West Bromwich Mortgage Company, their buy to let tracker mortgage margin will increase by 2% from December.

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