Buy-to-let fixed rates top 5.7% as 28 lenders reprice, putting London remortgages under pressure

A fresh rise in buy-to-let mortgage pricing has pushed average fixed rates above 5.7%, with 28 lenders repricing in a week and 20 making net increases.

Moneyfacts data, reported by Mortgage Strategy, shows the average two-year buy-to-let fixed rate is now 5.67%, up 7 basis points, while the average five-year fixed rate is 5.72%, up 8 basis points. This is a market shift, not a regulatory one: there is no new statutory duty for landlords. The real risk is commercial. Anyone refinancing in the next six to 12 months may now face higher borrowing costs and fewer workable options if lenders reprice again.

Why this matters more in London

Rate rises bite harder on larger loan balances. A landlord refinancing a £400,000 interest-only loan from 4.5% to 5.7% would see monthly interest costs rise from about £1,500 to £1,900 — roughly £4,800 a year extra. On a £600,000 loan, the same move adds about £7,200 a year.

That is why this matters disproportionately in higher-value London markets, where borrowing levels are high and yields are often tighter.

Affordability pressure can cut lender choice

The report does not say lenders have changed formal affordability rules this week. Even so, higher rates can still reduce the amount a landlord can borrow because rental cover tests become harder to meet as pricing rises.

That is especially relevant for portfolio landlords, limited company borrowers and owners of lower-yielding flats. If rent only just supports the loan at today’s stress rates, another 1% to 2% increase could narrow lender choice or force a lower loan amount.

Rent rises will not solve every refinance problem

Higher rents may help, but they are not a reliable short-term fix. In many parts of London, tenant affordability is already stretched, and an ambitious increase can lead to voids or arrears instead of better cashflow.

The legal position has not changed because of this mortgage news. Any rent increase still has to follow the tenancy agreement and the correct legal route.

Check timings before your fixed deal ends

If your mortgage expires within the next three to six months, get live quotes now. In a repricing market, a rate discussed with a broker can move before application, and some products are withdrawn with little notice.

Also check whether your lender allows a product transfer to be secured ahead of expiry, and weigh that against any early repayment charge. A lower headline rate is not necessarily cheaper if the exit penalty is significant.

Portfolio landlords need a refinance schedule, not a rough estimate

For larger landlords, this is a planning exercise across the portfolio. Build a schedule for every loan showing:

• lender
• property address
• outstanding balance
• current pay rate
• fixed-rate end date
• ERC
• reversion rate
• any issue that could delay a refinance, such as licensing, EPC, EICR or tenancy type

That last point matters. In practice, remortgages are often delayed by compliance or documentation problems as much as by pricing.

Higher rates can expose weak assets

A refinance at 5.67% to 5.72% can make an already marginal property look materially worse. Flats with high service charges, recurring repairs or weaker demand are the first to come under pressure.

Model each asset on real figures and compare three options where margins no longer work:

• inject equity
• accept a lower loan amount
• sell

The right answer depends on the property. A strong long-term asset may justify a weaker short-term yield; a flat facing major works may not.

Tighten arrears controls before cashflow narrows

Rising finance costs leave less room for late rent. If one property is already underperforming, missed payments can damage both monthly cashflow and the affordability picture a lender sees at refinance.

Review rent collection, guarantor paperwork and arrears escalation now, before the next mortgage deadline arrives.

What to do now

List every buy-to-let mortgage, flag all fixed-rate expiries over the next 12 months, rerun cashflow at current rates and at +1% to +2%, and get live options for any loan ending within six months.

Rentals & Sales can help you review London portfolio cashflow, rent levels and compliance risks before a remortgage application goes in.