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There is no sign of the Bank of England's low base rate changing any time soon, which means more buy-to-let borrowers are looking to tracker mortgages to help them save and make the most of their rental income.

According to Legal & General, 30% of buy-to-let mortgages were variable rates over the last three months, up from 13% at the halfway point of the year.

Stephen Smith, director of housing at Legal & General says: "There has been a distinct shift towards tracker and variable rates by landlords and the proportion of buy-to-let mortgages on variable rates arranged through our mortgage club has more than doubled in three months."

However, L&G says its data shows that landlords have traditionally preferred variable rates of one sort or another and that the big leap it has seen is from a low starting point – In the first three months of last year, for example, over 60% of buy-to-let mortgages were on variable rates.

Of course, in this low rate environment a tracker is always a risk – if base rate moves up quickly then a buy-to-let borrower with a tracker mortgage may find that they are dealt a huge rate shock. Smith says: "Bank base rates at this current level are far from normal and things will not go on like this forever."

Tracker, variable or fixed – there is only one best buy-to-let mortgage for you. And that can only be chosen correctly after careful consideration with a mortgage specialist, who knows the buy-to-let sector inside out. They will assess your rental potential, your long-term goals, your debts and your residential loan and use all that to help make a decision as to what buy-to-let loan is right for you.

SOURCE: L&G, 07/10/09

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