Interest-only mortgage recommended for investors

Interest-only mortgages are the best option for anyone who is planning to invest in buy-to-let property, one expert has claimed.

According to the director of a leading firm of independent financial advisors, anyone looking to buy a property to rent should consider this type of loan to maximise their profits.

Stephen Lee said that this was the "only way to actually have a self-funding property" and that the costs involved in monthly repayment mortgages were too high.

He added that the risk of negative equity is limited because a downturn in the property market was likely to recover in two or three years.

Mr Lee also noted that while it was an advisable loan for an investor, this was not necessarily the case for first-time buyers.

"Increasingly you get requests for them from first-time buyers, in order to keep their monthly repayments down," he said.

"[But] if they're not going to make any provisions for the future repayments of the mortgage, then that's something which is certainly against our advice."

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