Buy-to-let mortgage rates have climbed to their highest levels in up to two years as Middle East tensions continue to roil financial markets, with landlords now facing annual borrowing costs more than £1,100 higher than at the start of March.
According to the latest data from Moneyfacts, the average two-year fixed BTL rate has risen to 5.40 percent – the highest since February 2025 – while five-year fixes have reached 5.91 percent, a level not seen since January 2024.
Product choice collapses as lenders reprice
The rate increases have been accompanied by a sharp reduction in available products, with around 1,300 BTL mortgage deals withdrawn from the market since the start of March. Overall product choice has fallen below 5,000 for the first time since November 2025.
This follows Landlord Knowledge’s report last week that 1,700 residential mortgage products had been pulled as lenders scrambled to reprice in response to spiking swap rates.
Rachel Springall, finance expert at Moneyfacts, said the situation was causing significant pain for landlords. “Soaring borrowing costs will cause pain to landlords this year, as they join millions of consumers facing higher mortgage repayments,” she said.
“This is terrible news, as rising costs could lead to higher rental payments for tenants, or a drop in the pool of properties available for rent if landlords decide enough is enough and sell off their portfolio.”
Industry warns of cumulative pressures
Megan Eighteen, president of ARLA Propertymark, warned that the rate rises were adding to an already difficult environment for landlords. “Rising buy-to-let mortgage rates will place significant additional pressure on many landlords at a time when they are already grappling with substantial regulatory and cost burdens,” she said.
“Increased borrowing costs, combined with reduced product choice, risk undermining confidence in the sector and could ultimately restrict the supply of homes in the private rented market.”
Eighteen highlighted the cumulative impact facing landlords, who must also prepare for the Renters Rights Act coming into force on 1 May and potentially costly EPC upgrades required by 2030.
“There is a real concern that some may reassess their position and exit the market altogether,” she added. “This would exacerbate existing supply shortages and place further upward pressure on rents for tenants.”
What this means for landlords
- If you are remortgaging soon: A landlord borrowing £250,000 over 25 years now faces annual repayments roughly £1,100 higher than at the start of March, based on rates moving from 4.66 percent to 5.29 percent.
- Product availability: With fewer than 5,000 BTL products now on the market, landlords may have less choice and should allow extra time to find suitable deals.
- Watch for: Further rate movements if Middle East tensions persist or ease – swap rates remain volatile and lenders are repricing rapidly.
- Bottom line: The combination of higher rates, the approaching RRA deadline, and future EPC costs is squeezing landlord margins from multiple directions.
Editor’s view
The numbers tell the story: rates at two-year highs, over a thousand products gone, and £1,100 more per year to service the same debt. For landlords already budgeting for RRA compliance and EPC upgrades, this latest squeeze may tip the scales toward exit for some. Those who stay will need to factor higher financing costs into their yield calculations for the foreseeable future.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 31 March 2026
Sources: Moneyfacts, Propertymark
Related reading: Mortgage rates hit 5.5% as landlord borrowing costs reach 19-month high
