Interest rates play a big role in the buy to let market. Whether you are an experienced landlord or thinking about purchasing your first rental property, changes in interest rates can influence your monthly payments, your borrowing options and the overall return you achieve.

The good news is that with the right mortgage advice and a clear plan, landlords can stay in control and make confident decisions, even when the market shifts.

Why interest rates matter for landlords

Your buy to let mortgage rate affects your monthly costs, which in turn impacts your rental profit. If interest rates rise, mortgage payments can increase and landlords may need to review their mortgage deal to keep their finances working efficiently.

If rates fall, there may be opportunities to secure a better deal and reduce monthly costs, which can improve cash flow across a property portfolio.

Why buy to let mortgage rates are different to residential mortgages

Buy to let mortgage rates are often higher than residential mortgage rates. This is because buy to let lending is assessed differently, and the property is viewed as an investment rather than a home.

Lenders may take into account factors such as:

• the expected rental income and whether it comfortably covers the mortgage payments
• the size of the deposit and the overall loan to value
• the type of property being rented out
• whether you are a first time landlord or have an existing portfolio
• the wider level of risk involved in rental properties, including void periods

This does not mean buy to let is harder, it simply means the mortgage criteria and pricing can work differently compared to residential borrowing.

Fixed rate vs variable rate buy to let mortgages

One of the biggest decisions landlords make is choosing between fixed and variable options.

Fixed rate mortgages

A fixed rate mortgage means your interest rate stays the same for a set period, such as two, three, or five years. This gives you stability and makes it easier to budget because your payments remain predictable throughout the fixed term.

Fixed rates are often popular when landlords want certainty and prefer to avoid sudden changes in monthly costs.

Variable and tracker mortgages

Variable rate mortgages can change, which means your payments may go up or down. Tracker mortgages follow a base rate, so if the base rate changes, your mortgage rate changes too.

These options can be helpful for some landlords, especially if they expect rates to fall or want flexibility. It is important to understand that payments can increase, so budgeting carefully is essential.

How interest rates can impact affordability

Buy to let mortgage lending is often based on rental income, rather than salary alone. Lenders typically assess whether the expected rent covers the mortgage payments by a certain margin. This is known as a rental stress test.

When interest rates rise, the stress test can become more challenging. This can affect:

• how much you can borrow
• which lenders are available to you
• how much deposit you may need

For landlords, this makes it even more important to secure the right deal and have a clear understanding of lender criteria.

What landlords can do when rates change

Interest rates changing does not mean landlords have to put plans on hold. It simply means it is worth reviewing your options and choosing the right approach for your goals.

Here are a few practical ways landlords can stay in control:

Review your mortgage before your deal ends

If your current fixed rate is ending, it is worth exploring options early. Many landlords start reviewing deals several months in advance, giving time to compare rates and avoid moving onto a higher standard variable rate.

Consider your loan to value

Your loan to value, which is the size of your mortgage compared to the value of the property, can affect the rates available. If your property value has increased or you have paid down part of your mortgage, you may be able to access more competitive deals.

Look beyond the headline rate

Some mortgages come with arrangement fees, valuation costs, or incentives. A lower rate is not always the best deal if the overall cost is higher. Comparing mortgages properly can save money in the long run.

Get advice based on your wider plans

Every landlord is different. Some want to grow a portfolio, others want to improve monthly cash flow, and some may be planning refurbishment or a future sale. The right mortgage choice depends on your goals, not just the rate.

How can we help landlords

Landlords benefit from having expert support, especially when interest rates are changing. One of our independent mortgage advisers can help you review your current position, compare buy to let mortgage options, and secure a deal that suits your plans.

Whether you are buying your next property, reviewing your current mortgage, or exploring the best way to manage rising costs, we are here to guide you through the process clearly and confidently.

To discuss your buy to let mortgage options, get in touch with any of our local offices or email This email address is being protected from spambots. You need JavaScript enabled to view it.