OVERPAYING YOUR BUY-TO-LET MORTGAGE - BEWARE!

Tax Planning and Financial

I'm sure that many of you, like me, have thought that the most sensible place to put the proceeds of Mr King's generous interest rate reductions, is back into your buy-to-let mortgages? This makes so much sense in terms of compounding the interest gain and reducing yoru payments even further. In effect you are making a savings pot for a rainy day? Beware however, this is exactly what I have done with a couple of my BTL mortgages, but out of curiosity I asked the question about drawing this money down should I need it - let's face it, now is a good time to buy. But CHL mortgages have changed their criteria - note the word 'criteria' - they haven't changed their terms and conditions that you signed up to, criteria are different!! So, from now on borrowers are only allowed to borrow up to 50% of the loan to value of the property - EVEN ON EXISTING FLEXIBLE mortgages. If you know that you will not need this money in the future, then go ahead. I'm curious to know whether these 'overpayments' will count towards arrears and prevent penalty charges - I have just changed banks and lo and behold the D/D failed - I am currently well in credit, but could still be charged by CHL for the payment failing!