UK portfolio landlords coming off a fixed-rate buy to let mortgage have a critical decision to make – and failing to refinance could cost them more than £23,000 in extra mortgage payments, new data reveals.
Specialist finance broker Rangewell has published fresh analysis showing the stark financial gap between landlords who proactively refinance their portfolios and those who simply slide onto their lender’s standard variable rate. With average rates having dropped significantly since 2022, refinancing could reduce mortgage costs by £8,563 over two years – but inaction could add £23,270 in extra costs.
Alasdair McPherson, Head of Partnerships at Rangewell, called the current environment a “decisive” opportunity for proactive landlords to regain financial control and reinvest strategically.
“For portfolio investors, this isn’t just about individual savings – it’s about managing cash flow on a property-by-property basis, leveraging equity to grow the portfolio, and avoiding thousands in unnecessary cost,” he said.
Landlords sitting on SVRs risk draining portfolio profits
Two years ago, the average UK portfolio landlord held 8.6 buy-to-let properties, spread across 5.8 loans, with £503,680 in mortgage borrowing. At that time, the average 2-year fixed rate was 4.78%, meaning interest-only payments came in around £2,006 per month.
Today, the average fixed rate has fallen to 3.93%, bringing monthly costs down to £1,650 – a saving of £357 per month. Over a new 24-month term, that’s a £8,563 reduction in outgoings – a meaningful margin in a climate where tax changes and operating costs continue to bite.
However, landlords who fail to refinance and drift onto their lender’s standard variable rate (SVR) – currently averaging 7.09% – could see payments soar to £2,976 per month. That’s £970 extra every month, or £23,270 over two years.
“The gap between best-in-market rates and legacy rates that landlords can fall into through lack of research or professional funding support is now dangerously wide,” McPherson warned.
Specialist sectors now offer refinancing potential
Rangewell also pointed to several specialist portfolio types that are becoming more attractive to lenders – offering landlords new refinancing routes and portfolio expansion opportunities.
- Semi-commercial properties such as flats above shops are seeing improved refinancing terms, with lenders now valuing the stronger retail yields that help offset residential exposure.
- Holiday let portfolios, once difficult to underwrite, are drawing interest from lenders more willing to back well-managed operations. This could unlock equity for further acquisitions.
- Supported living and social care portfolios, historically neglected by mainstream lenders, are now being actively supported by specialist funders who understand the operating model – creating new refinance and expansion routes.
- Foreign investors with UK property have long faced inflated interest rates. But lenders are increasingly recognising overseas landlords as a stable asset class, offering competitive terms that allow them to restructure for better returns.
- Houses in Multiple Occupation (HMOs) – especially those aimed at students and professionals – remain a lender sweet spot. Strong rent coverage and rising tenant demand mean landlords can now access HMO rates on par with standard BTL.
- Multi-unit freehold blocks (MUFBs) with five or more self-contained flats under one title are also seeing favourable treatment. With a robust rent roll, these can often qualify for near-standard BTL rates.
“With the right rent roll and valuation evidence, we can often secure rates close to standard BTL terms, even at scale,” said McPherson.
Landlords must act swiftly
This latest insight will serve as a wake-up call for portfolio landlords approaching the end of fixed deals. In a market still defined by squeezed margins and fierce regulatory headwinds, reducing borrowing costs is one of the few levers left to maintain profitability.
As refinancing windows open, the cost of delay is no longer theoretical – it’s potentially tens of thousands of pounds lost to higher rates. For landlords managing complex portfolios, this isn’t just about trimming a few basis points – it’s about protecting long-term strategy, cash flow, and the ability to reinvest.
