0:01 AM, 30th May 2025, About 8 months ago 2
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Buy to let mortgage brokers have revealed a strong preference for recommending five-year fixed-rate mortgages to landlords, though shorter-term options are gaining ground.
The survey from Landbay shows that 83% of brokers advocate fixed-rate deals, with 42% specifically endorsing five-year fixes.
In contrast, only 17% support tracker mortgages, and just 3% recommend 10-year fixes.
The lender’s sales and distribution director, Rob Stanton, said: “Brokers’ preference for five-year fixed mortgages reflects their focus on providing landlords with stability in a volatile market.
“Landlords are navigating choppy regulatory waters and significant economic headwinds.
“It’s perfectly sensible to lock into certainty under the circumstances. It’s predictability over flexibility.”
He added: “There has been a shift in the BTL market’s preference for short-term deals and fixes.”
Mr Stanton continued: “In the second quarter of 2022, 83% of BTL landlords told us they were looking at five-year or 10-year fixes.
“Only one in six – 17% – were interested in trackers or short-term fixes.
“The majority of the industry was looking to shield against rate hikes.”
He adds: “Compare that to today with 55% of brokers saying trackers and short-term two-year fixes are their go-to mortgage recommendation.
“In that context, it’s a completely different story.
“Brokers’ recommendations suggest a strategic shift away from surety and predictability, towards affordability and profitability.”
The survey highlights a shift in broker recommendations, with 38% now leaning towards two-year fixed deals and trackers becoming more appealing.
This change comes as the Bank of England reduced interest rates for the fourth time since August 2024, with expectations of further cuts in the next 12 months.
Forecasts suggest three more 0.25 percentage point reductions by year-end, potentially bringing rates to 3.5%.
Currently, more than seven million UK households are on fixed-rate mortgages, compared to fewer than 600,000 on trackers, which follow the Bank of England’s base rate plus a margin.
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Member Since May 2014 - Comments: 79
10:35 AM, 30th May 2025, About 8 months ago
You need to be sure before committing to a 5-year fix in this market. The knives are out for the PRS, there’s a possibility of more changes that will affect the market and landlord profitability/viability. 5 years is a long time if you want to get out…unless you pay hefty exit penalties.
I was doing 5-year fixes 2 or 3 years ago. Rates were cheaper than 2-year fixes, labour wasn’t twisting the knife, and rates never come down as quick as the “experts” predict. So it’s 2-year fixes for me right now 🤷🏻♂️.
I use The Mortgage Works…consistently good value (most of the time!), and avoids the hassle/cost of chopping and changing lenders.
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Member Since December 2023 - Comments: 1522
12:56 PM, 30th May 2025, About 8 months ago
Brokers weren’t recommending trackers in 2003 when I took my lifetime trackers. BofE base rates collapsed in late 2008 and I enjoyed 14 years of very cheap money.
When my daughter bought her first home in 2021, her broker recommended a 2 year fix. I suggested 10 or 5 years. She went with the broker’s recommendation.
Some brokers seem to like repeat business.
Will interest rates collapse again? I think that if they do, we are in serious trouble.