ModaMortgages Launches Limited-Edition Five-Year Fixed Buy-to-Let Mortgages: What London Landlords Need to Know

What’s New from ModaMortgages?

ModaMortgages has launched a limited-edition range of five-year fixed buy-to-let mortgage products tailored for the current market. These include options for single residential dwellings, Houses in Multiple Occupation (HMOs), and multi-unit freehold blocks. Rates start at 5.14%, with loan-to-value (LTV) limits up to 80%, and free property valuations as part of the application.

Why This Matters to London Landlords

The buy-to-let mortgage market continues to face rising interest rates and tighter lending criteria, making fixed-rate deals attractive for cost certainty. A five-year fixed rate gives landlords stability over repayments, helping with budgeting and protecting against short-term rate hikes.

For London landlords, where property values and rental incomes tend to be higher and more volatile, securing a competitive fixed rate can safeguard profitability and facilitate long-term planning.

Practical Implications Across Landlord Profiles

• Single-Unit Landlords: Those with one or two properties can benefit from locking in a fixed rate for five years, especially if their current deals are nearing expiry or on variable rates. The 80% LTV is a reasonable upper limit, but landlords should assess if refinancing at this level suits their equity and income position.

• HMO Landlords: ModaMortgages’ inclusion of HMOs is notable since these often carry higher lending risk. The availability of fixed rates from 5.14% can improve cash flow certainty for landlords managing multiple tenants, but careful assessment of eligibility criteria is advised.

• Multi-Unit Freehold Block Owners: This product suits landlords owning multiple flats within a freehold block, a growing segment in London. Fixed five-year rates at competitive LTVs offer an opportunity to secure financing on terms that support portfolio growth or refurbishment plans.

• Accidental Landlords: Those who inherited property or rented out a family home may find these fixed-rate options beneficial if they want to professionalise their mortgage arrangements and reduce exposure to rate fluctuations.

Assessing the Deal: What to Review

• Interest Rate vs Market: While 5.14% is competitive in today's environment, landlords should compare this with their current rates and other lenders’ offers.

• Loan-to-Value Limits: Up to 80% LTV is typical but landlords should ensure their property valuations support this and that their income profile meets affordability criteria.

• Fees and Valuations: ModaMortgages offers free valuations, which can reduce upfront costs. However, landlords should confirm any arrangement or product fees.

• Product Availability: As this is a limited-edition product, landlords should act promptly and liaise with mortgage brokers to confirm availability.

Recommended Next Steps for Landlords

1. Review Existing Mortgage Terms: Identify any upcoming deal expiries or variable-rate mortgages that may benefit from switching to a fixed rate.

2. Contact a Specialist Mortgage Broker: Use an adviser familiar with buy-to-let lending to assess eligibility and suitability of ModaMortgages’ products.

3. Run Portfolio Impact Scenarios: For portfolio landlords, model cash flow and affordability impacts of switching to a five-year fixed product across different property types.

4. Coordinate with Letting Agents: Ensure agents understand potential changes in mortgage costs and rental pricing strategies to maintain returns.

5. Schedule Mortgage Reviews: Regularly revisit mortgage arrangements to capture market opportunities and manage refinancing risks.

How Rentals & Sales Can Support You

Our team offers tailored portfolio reviews and compliance audits that include mortgage strategy assessments. We can work alongside your mortgage broker to optimise financing terms and align your rental pricing strategy with cost changes.

Contact us to arrange a consultation that matches your landlord profile and investment goals.

Disclaimer: This article is for informational purposes and does not constitute financial advice. Landlords should consult qualified mortgage advisers before making lending decisions.