Buy to let lenders offer ‘golden goodbye’ discounts

Buy to let lenders offer ‘golden goodbye’ discounts

13:13 PM, 17th January 2011, About 14 years ago 4

Text Size

Cash-strapped banks are offering to write off huge amounts to encourage landlords and property investors to remortgage to another lender.

Some banks are offering up to 25% of any mortgage debt as an incentive.

The banks are generally those that picked up bailout money from the UK and Irish taxpayers to ease their way through the credit crisis.

The latest reportedly making the offer is the desperately financially troubled Anglo Irish Bank (AIB) that received 30 billion Euros from the Irish government recently. 

Other banks willing to make a ‘golden goodbye’ deal are said to include Bank of Scotland and the Royal Bank of Scotland. The Bank of Scotland has told the Financial Times that the lender does not have a policy to encourage customers. 

Typical deals property people can negotiate with lenders include waiving early repayment charges or writing off any amount from 10% to 25% of a loan.

Inflation and fears of rising interest rates haunt property market

Many credit card and loan companies will accept similar offers on outstanding debts as well.

Last year, other mortgage lenders such as the now defunct Bradford and Bingley offered similar deals. The former bank was split between Santander and public ownership. 

Customers offered loan discounts are often those with large portfolios exposing the banks to a higher financial risk.

Meanwhile, economists are predicting that interest rates will rise soon forcing more buy to let investors in to debt as mortgage repayments rise above rents received.

Last week, the Bank of England decided to peg rates at 0.5% but is coming under increasing pressure to tackle inflation that is expected to hit 4% or more by the spring – almost double the government’s inflation target for keeping the economy on track.

The fear is many tenants are already financially stretched with recent VAT and price increases and that they will start racking up rent arrears that will in turn mean landlords will not be able to pay buy to let mortgages.

Share This Article


21:41 PM, 19th January 2011, About 14 years ago

Are Mortgage express or Mortgage Trust
Making any offers to existing BTL. Landlords

21:49 PM, 19th January 2011, About 14 years ago

It's highly unlikely that Mortgage Trust will as they are owned by Paragon who are doing very well. Mortgage Express are waiving early repayment charges and there's a lot of speculation that they will incentivise borrowers to leave in other ways but I have no evidence of this yet.

8:07 AM, 20th January 2011, About 14 years ago

I know that CHL stopped lending some time ago, would they be open to a similar approach?

8:32 AM, 20th January 2011, About 14 years ago

They can only say yes or no - let us know how you get on.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now