HSBC cuts buy-to-let rates tomorrow as Virgin pushes some landlord transfer deals higher

HSBC will cut a range of buy-to-let mortgage rates tomorrow, but landlords should not assume refinancing just got cheaper: Virgin Money is increasing some product-transfer rates at the same time.

That split matters because the cheapest-looking option is not always the best one. A product transfer is often faster and lighter on paperwork than a full remortgage, but if transfer pricing has moved up while new-business rates have edged down, staying with the same lender can cost more than switching. If your fixed rate ends within the next three to six months, compare both routes now, including any early repayment charge on your current deal.

The headline cuts elsewhere do not change that calculation. Gen H has already reduced selected 90% and 95% LTV products, and other lenders including Nationwide, Santander and Nottingham Building Society have also announced reductions. But high-LTV cuts are mainly relevant to purchases and highly leveraged borrowers, not most standard landlord refinances. A lower rate at 90% or 95% LTV does not remove the underlying risk of tighter affordability, weaker exit options or thinner cash reserves if rents dip or costs rise.

For London landlords in particular, small pricing moves can still have a material effect on cashflow because loan sizes are larger and yields are often tighter. But the right comparison is not the headline rate. It is the total cost over the next two or five years, including arrangement fees, valuation costs, legal fees and any ERC. On bigger loans, a modest rate cut can be wiped out quickly by fees.

Affordability also needs a reality check. Many lenders still apply stress rates and interest cover tests that do not move in line with a product repricing. That means a cheaper pay rate may improve monthly surplus without significantly increasing how much you can borrow. Portfolio landlords should be especially careful here, because one weaker property can affect how a lender views the wider book.

There is no new legal requirement created by these repricings, but refinance cases can still stall on routine compliance points. Lenders and brokers may ask for current tenancy agreements, rent statements, buildings insurance, gas safety records, EICRs, EPCs and any HMO or selective licence that applies. In London, where borough licensing rules vary sharply, an incomplete file can delay a remortgage long after the attractive rate has gone.

The immediate job is simple: identify any buy-to-let mortgage coming to the end of its fixed term, pull updated illustrations for both remortgage and product transfer, and compare monthly payment, total cost and stressed cashflow side by side. Landlords drawing extra funds should also make sure the rent on the tenancy agreement matches the rent being received and the figure declared to the lender, because mismatches are a common underwriting delay.

Rentals & Sales can help London landlords review remortgage versus product-transfer options against actual rent, licence and safety paperwork before a lender reprices again.