Landlords across the UK are beginning to see the benefit of a wave of mortgage rate reductions, with many brokers suggesting that now may be an opportune moment to secure a new deal. These cuts are making certain products far more attractive, especially for those looking to remortgage or invest in new properties.
HSBC has recently made headlines by reducing its already competitive buy-to-let mortgage rates even further. The bank has trimmed rates by up to 0.25 percentage points, offering landlords a broader range of more affordable borrowing options.
For example, landlords remortgaging at a 60% loan-to-value (LTV) ratio in their own name can now access HSBC’s lowest rate of 3.74%. This deal comes with a £3,999 product fee and applies to a two-year fixed rate mortgage.
To put this into perspective, a landlord with a £200,000 interest-only mortgage choosing this two-year fix would be looking at monthly repayments of around £635, assuming the fee is added to the loan. This is significantly more competitive compared to national averages.
Current data from Moneyfacts suggests that the average two-year fixed rate for buy-to-let mortgages stands at 4.99%, while the five-year fix sits even higher at 5.29%. Under these average rates, monthly payments on a £200,000 loan would be approximately £832 for a two-year fix and £882 for a five-year fix.
HSBC is also extending attractive purchase rates. For landlords with a 40% deposit, there’s now a five-year fixed rate available at 3.84%, again with a £3,999 fee. Those putting down a 25% deposit can still access a competitive 3.94% rate with the same fee.
The lender is also offering alternative products with lower upfront fees, which may be more suitable for landlords borrowing smaller amounts. Calculating the true cost of these deals, including fees and interest, is essential—and tools like mortgage calculators can help investors make better-informed decisions.
In addition to HSBC, NatWest has entered the competition by lowering its buy-to-let mortgage rates as well. For landlords purchasing with a 40% deposit, NatWest now offers a 4.1% rate with a £995 fee. Those with a 25% deposit can opt for a 4.33% rate, also with a £995 fee.
Mortgage brokers are noting a clear trend. Aaron Strutt from Trinity Financial commented that lenders have been consistently reducing their buy-to-let rates in an effort to appeal to landlords. The market is saturated with options featuring either low rates with high fees or vice versa.
According to Strutt, landlords are still active in the market, especially those purchasing in northern England or through limited companies. Remortgaging is also on the rise, and property owners are clearly motivated to lock in the best possible rates.
Due to the intense competition among lenders, many landlords are finding it worthwhile to switch providers. This competitive landscape is creating more opportunities for savvy investors to optimise their borrowing costs.
Low rate, high fee mortgages gain popularity
The Mortgage Works (TMW), the buy-to-let division of Nationwide Building Society, has joined the trend by reducing its mortgage rates. Last week, the lender introduced new deals that may appeal to landlords searching for competitive remortgage or purchase options.
One of its standout offers is a two-year fixed rate at just 2.79%, available to those with a 35% deposit. However, this product comes with a rather steep fee—3% of the total loan amount.
To illustrate, on a £200,000 interest-only mortgage, monthly payments would be around £468. If the fee—amounting to £6,000—is added to the mortgage, this would push monthly payments up slightly to £480.
Mortgage broker Aaron Strutt described the deal as particularly useful for landlords looking to remortgage without experiencing a jump in their monthly repayments. While the fee is on the high side, the low interest rate helps maintain better cash flow.
He shared an example of a recent client who chose a similar low-rate, high-fee mortgage. The landlord had built up equity in her property and was using the rental income to support her living costs. For her, securing a lower monthly payment outweighed the larger upfront cost.
Though not suitable for every landlord, this kind of product provides an appealing headline rate. Strutt pointed out that once the fee is accounted for, the effective rate is closer to 4.29%, which may still be worthwhile depending on individual circumstances.
Deals like these—featuring low rates paired with significant fees—are becoming increasingly common across the market. Some lenders are introducing particularly aggressive pricing strategies.
For instance, Capital Home Loans is now offering a two-year fix at just 2.35%, but with an even higher fee of 7%. While the rate is eye-catching, the fee may be off-putting for some investors.
Generally, lenders are offering landlords a choice between two main types of deal: one with a low interest rate and high fees, and the other with a higher rate but no upfront fees. This allows borrowers to choose what suits their finances and borrowing goals.
BM Solutions, a buy-to-let lender, provides both options. Landlords can either choose a 4.32% two-year fixed rate with no product fee at 50% loan-to-value (LTV), or a lower 2.93% rate with a 3% fee at the same LTV.
According to Strutt, lenders are actively cutting rates to attract landlord business. In some cases, buy-to-let deals have now dipped below residential mortgage rates, which historically have always been cheaper.
These sub-3% products clearly show the level of competition among lenders wanting to expand their buy-to-let mortgage books. It’s a strong signal that the market is evolving rapidly.
High-fee, low-rate deals are often tailored to help landlords access larger loans. For many, the rent received from properties isn’t enough to meet the affordability checks required for bigger borrowing amounts—especially when they are looking to raise capital at the same time.
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