Mortgage Express, the buy-to-let arm of Bradford & Bingley, announced today that it is waiving early repayment charges for customers wishing to pay off their mortgage between February and June this year.

Having stopped lending in September, Mortgage Express says that it may not be able to offer competitive deals for existing customers. Early repayment charges are typically between 1 per cent and 2 per cent of the mortgage.

A Mortgage Express spokesman said: “We understand that customers may wish to reconsider their mortgage arrangements – either by selling a property, moving their mortgage to another lender or paying off some or all of their mortgage.

“Those with an early repayment charge (ERC) could be faced with a significant cost if they move their mortgage to another lender or make a capital repayment, which could be a barrier to considering these options.”

The lender is writing to all its customers to inform them of the ERC change.

David Hollingworth, of London & Country, the mortgage broker, said: “Mortgage Express is clearly trying to run down its book, but borrowers should think carefully about their options. Buy-to-let mortgage rates continue to be relatively high and most lenders will want a deposit or equity of at least 30 per cent.”

Cheltenham & Gloucester is currently offering a five-year fixed-rate buy-to-let mortgage at 5.39 per cent, but only on up to 60 per cent of a property's value. The deal also comes with a 2.5 per cent fee.

Mr Hollingworth added: “If landlords are on reasonable fixed-rate deals with Mortgage Express, they may wish to sit tight. They may not necessarily be able to get a better deal elsewhere, especially if they do not have much equity in their property. If a landlord has some spare cash, it may be a good opportunity to pay off more of the mortgage. Borrowers should talk to a broker to decide the best course of action.”

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