Buy-to-let mortgage rates and what lenders want now

UK-wide. We are not mortgage brokers and are not regulated to advise on mortgages — this explains how the market works, not which product to take.

Where rates sit

Bank Rate has been held at 3.75% since the July 2026 meeting, with the next decision due in September. At the time of writing the sharpest advertised buy-to-let products sit around 3.1% on a two-year fix and 4.2% on a five-year, both at conservative loan-to-values and both carrying substantial fees.

Those headline numbers are not what most landlords pay. They are the products at the bottom of the best-buy table, available at lower loan-to-value, with the largest fees. A typical 75% loan-to-value product sits meaningfully above them.

Why the fee usually matters more than the rate

Buy-to-let arrangement fees are frequently charged as a percentage of the loan — commonly 3% to 5% on the sharpest-looking products. On a £150,000 loan, a 5% fee is £7,500. Spread over a two-year fix that is roughly 2.5 percentage points a year, which comfortably outweighs the half-point saved on the headline rate.

Product	Rate	Fee	Interest over 2 years	Total cost
Low rate, high fee	3.10%	£7,500	£9,300	£16,800
Higher rate, low fee	4.60%	£999	£13,800	£14,799

Adding the fee to the loan makes it worse again, because you then pay interest on it for the whole term rather than the two years you fixed for. That is often the right choice for cash flow, but it should be a decision rather than a default.

The stress test

Lenders do not size the loan on what you will actually pay. They apply an interest coverage ratio to a stressed interest rate.

Borrower	Cover required	Rent needed on a £150,000 loan stressed at 5.5%
Basic-rate taxpayer	125%	£859 a month
Higher-rate taxpayer	145%	£997 a month
Limited company	Often 125%	£859 a month

The stress rate itself is typically a floor of around 5.5%, or the product rate plus about two points, whichever is higher. The important exception: fixed terms of five years or more are usually assessed at or close to the pay rate instead.

What else lenders look at

• Minimum income. Many lenders want £25,000 of income outside the rent, though some will lend without it at lower loan-to-value.
• Deposit. 25% is the practical minimum; the best pricing starts around 40%.
• Property type. Flats above commercial premises, ex-local authority high-rise, non-standard construction and short leases all narrow the lender pool sharply.
• HMOs and multi-unit blocks. Priced higher, fewer lenders, and licensing status matters. See HMO licensing.
• Portfolio landlords. Four or more mortgaged buy-to-lets triggers portfolio underwriting: business plan, cash flow, and stress testing across the whole portfolio rather than just the property you are buying.
• Company structure. Limited company products price above personal ones with a smaller lender pool, and a personal guarantee is close to universal. See when a company pays.

Remortgaging in 2026

If you are coming off a fix taken in a cheaper market, the arithmetic has changed underneath you. Two things to do before the rate expires:

1. Run the stress test at current rates, not the rate you have been paying. A loan that passed at 2% may not pass at a 5.5% stress, which can force a reduction in borrowing at exactly the moment you need to refinance.
2. Start six months out. Most offers are valid for three to six months and rates can usually be secured early and reviewed downward if the market improves. Rolling onto a lender’s standard variable rate while you organise yourself is expensive.

Where the rent no longer supports the existing loan, the options are a product transfer with your current lender — which often avoids a fresh affordability assessment — a capital reduction, or a longer fix to relax the stress. A broker earns their fee in exactly this situation.

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