Mortgage Works Cuts Buy-to-Let Fixed Rates: What London Landlords Need to Know

What’s Changing?

The Mortgage Works, a specialist lender focused on UK buy-to-let mortgages, has announced interest rate reductions of up to 0.15 percentage points on select fixed-rate mortgage products. These cuts will apply to two, three, and five-year fixed mortgages with varied fees and loan-to-value (LTV) criteria, starting January 2026.

This reduction affects both new applicants and existing borrowers who might have products coming up for renewal. While a 0.15% drop might seem modest, for landlords juggling tight rental margins, it can translate into tangible savings and enhanced portfolio resilience.

Why This Matters to London Landlords

London landlords face some of the highest property prices and operating costs across the UK, making any reduction in financing costs significant. Lower mortgage interest rates directly reduce monthly outgoings, affecting:

• Cash flow: Improved liquidity for property upkeep, void periods, or investment in additional units.
• Rent setting: Potential to adjust rental pricing strategies more competitively without eroding returns.
• Profitability: Enhanced net yields even amidst inflationary pressures and rising maintenance expenses.

For single-unit landlords, the impact may represent a meaningful percentage of their net rental income, while portfolio landlords can scale these savings across multiple properties, magnifying benefits.

Practical Implications and Risk Considerations

1. Review Financing Arrangements Now Start dialogues with your mortgage broker or lender to confirm eligibility for new rates and understand product-specific terms, including any fees that might offset rate savings.

2. Evaluate Remortgaging or Switching Options Although the rate cut is relatively small, depending on your current rate and remaining term, refinancing could be financially advantageous. However, factor in:

• Early repayment charges
• Arrangement or application fees
• Potential changes in lender criteria

3. Update Budgeting and Rent Strategies With lower mortgage costs, revisit your cash flow forecasts and rent setting models. If your properties are in competitive markets, a modest rent adjustment combined with cost savings could reduce void periods or tenant churn.

4. Consider Timelines and Deadlines Mortgage rate changes take effect in January 2026, giving landlords approximately six months to assess and act. Plan to:

• Identify mortgages maturing in the next 12–18 months
• Schedule financial reviews by Q3 2025
• Engage brokers early to secure best possible terms before the change

5. Different Profiles, Different Approaches

• Accidental landlords with fewer properties should weigh the costs and benefits of switching, considering cash availability and long-term plans.
• HMO operators might prioritise liquidity to fund property improvements or compliance costs; rate cuts help free up capital.

Next Steps for Landlords and Letting Agents

• Verify eligibility: Contact The Mortgage Works or your mortgage provider to check if you qualify for the new rates.
• Financial modelling: Work with your accountant or broker to simulate scenarios including refinancing costs.
• Action plan: Decide whether to refinance, switch products, or maintain existing arrangements.
• Communication: Keep tenants informed if rent changes are planned, explaining market context to maintain good relations.

How Rentals & Sales Can Support You

Our specialist team offers bespoke portfolio reviews and compliance audits tailored to London landlords. We can:

• Analyse your mortgage portfolio against current market products
• Help forecast rental income scenarios factoring in new mortgage costs
• Advise on rent strategy adjustments to protect profitability

Contact us for a detailed consultation to navigate these changes with confidence and minimise risk.

Disclaimer: This article does not constitute financial advice. Landlords should seek personalised advice from qualified mortgage brokers or financial advisors before making refinancing decisions.