Some property owners on tracker mortgages are currently paying "silly money - virtually nothing"on their home loans, it has been suggested.

According to Catherine Hearnden, director of independent financial adviser group MyMortgageDirect, this is a result of the Bank of England's decision to reduce interest rates in recent times.

Indeed, the comments echo those made last month by LettingZone's managing director Mark Garner, who said that private landlords on this type of mortgage will be "reaping the full benefit of the low base rate"and experiencing a positive cash flow at present.

Ms Hearnden warned that when interest rates start to rise again, landlords and other homeowners will have to step up their payments - but the level required will still be lower than when they began.

Her comments came in the wake of the Bank of England's monetary policy committee keeping the cost of borrowing at 0.5 per cent last Thursday.

It was the six successive month that the base rate has been frozen at this record-low level.

Written by Sarah Field


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