Kensington cuts 75% LTV buy-to-let rates, but 5% fees could wipe out the saving

A 0.15-point rate cut sounds useful, but on Kensington’s latest 75% LTV buy-to-let deals, the 5% product fee may matter far more than the headline rate.

Kensington Mortgages has reduced selected 75% loan-to-value buy-to-let rates across its Prime, Prime eKo and Core ranges. Trade reporting in Mortgage Strategy says the revised pricing includes Prime two-year fixes from 3.69% with a 5% fee and five-year fixes from 4.99% with a 5% fee. In Prime eKo, two-year fixes start at 4.39% and five-year fixes at 5.07%, both with a 3% fee. Core products now include two-year fixes from 3.99% with a 5% fee and five-year fixes from 5.42% with a 3% fee.

The important limitation is that these cuts apply to selected 75% LTV products only. Landlords should not assume the same pricing logic carries across to lower LTV bands.

The fee is the real story

For many borrowers, the first calculation should be the fee in pounds. A 5% fee on a £300,000 loan is £15,000. On a £500,000 loan, it is £25,000. That can overwhelm the benefit of a modest rate reduction unless the mortgage is kept long enough for the monthly saving to catch up.

On an interest-only basis, a 15 basis point cut is worth roughly £450 a year per £300,000 borrowed. That is welcome, but it does not offset a five-figure fee on its own. For landlords refinancing larger London loans, this is a total-cost exercise, not a rate-shopping exercise.

Prime eKo is only available on stronger EPCs

The Prime eKo range comes with a strict eligibility filter: the property must have an EPC rating of A, B or C. If the current certificate shows D or below, that pricing is off the table unless the rating is improved and the EPC is updated.

That is a lender rule, not a change in the legal minimum standard for letting. In England, the general minimum energy efficiency standard for most privately rented homes remains EPC E, subject to exemptions. Landlords should not confuse a green mortgage product with the baseline legal test for renting out a property.

Free valuations do not remove licensing or underwriting risk

Kensington is also reported to be offering free valuations on all buy-to-let applications, including HMOs and multi-unit blocks. That may trim one switching cost, but it does not make complex cases simpler.

For HMOs and multi-unit properties, landlords should still expect scrutiny on licensing, planning where relevant, fire safety, layout, tenancy structure, rental evidence and the current EPC. In London, local licensing rules can be the issue that delays or derails a refinance long before the rate becomes relevant.

The key question is timing

Landlords already inside a fixed term need to look beyond the new pay rate. Early repayment charges, legal costs and the likely holding period all affect whether a switch makes sense. In some cases, a product transfer with the current lender will still be cheaper than a full remortgage, even if the headline rate is higher.

That is especially true for borrowers who may refinance again after works, restructuring or a future sale. A 3% fee can prove cheaper overall than a lower-rate product with a 5% fee if the loan is unlikely to stay in place for long.

How landlords should assess these deals

A sensible triage process is straightforward:

1. Identify mortgages ending within the next 6 to 12 months and check whether any early repayment charge still applies.
2. Confirm the current LTV and EPC before assuming a property qualifies for the cheapest Kensington options.
3. Run the numbers in pounds, including the rate, fee, valuation saving, legal costs and expected holding period.

The headline cut is real, but the commercial value depends on the structure of the deal. For many landlords, the most important number in this launch is not 3.69%. It is 5%.

Rentals and Sales can help you assess whether a Kensington refinance stacks up on your actual loan size, EPC position and licensing status before you commit to a new deal.

This article is for general information only and is not mortgage, tax or legal advice.