BTL landlords fuel refinancing surge as fixed term deals expire

There has been a surge in buy to let mortgage refinancing activity as landlord fixed-term deals end and they look at switching portfolio strategies.

Research from Pegasus Insight, a mortgage market specialist, reveals that 60% of landlords with BTL loans have seen a fixed-rate deal end in the past two years.

Of those, 26% switched to a new lender, with this figure climbing to 37% for those managing 11 or more properties, highlighting a trend among seasoned investors to seek better terms.

The study shows that 67% of landlords opted to stay with their current lender, with a third choosing a product transfer and another third remortgaging.

Landlords are commercially focused

A director of the firm, Bethan Cooke, said: “The expiry of fixed rates has created a refinancing flashpoint, particularly for portfolio landlords faced with multiple mortgages maturing within a short timeframe.

“These landlords are pragmatic and commercially focused; the data suggests that they are more likely to seek out competitive terms from new lenders, weigh up incorporation strategies and look for support managing their refinancing pipeline efficiently.

“Refinancing is not just a transactional moment, it’s a strategic inflection point for many landlords.”

She added: “With margins under pressure and confidence still fragile, landlords are thinking carefully about their costs and looking for product flexibility.

“For portfolio landlords in particular, this is about streamlining complexity and making their finance work harder.”

Portfolio landlords show flexibility

The research also reveals that larger portfolio holders have shown greater flexibility, with many exploring new providers to optimise their financial arrangements.

Challenges were reported by 36% of landlords during refinancing, with higher interest rates and fees, as well as valuation issues being the primary hurdles.

Despite these obstacles, 64% of landlords navigated the process smoothly.

Pegasus says that most landlords began securing new deals three to six months before their fixed rate ended.

However, those who remained with their existing lender often delayed fixing a new BTL deal until closer to the deadline.

Refinancing 2.4 BTL loans

Looking forward, 40% of landlords with borrowing intend to refinance within the next year, a figure that rises to 53% for those with four or more mortgages.

On average, landlords anticipate refinancing 2.4 loans each, with portfolio investors managing nearly 10 mortgages expecting to handle around three loans.

Competitive interest rates top the list of priorities for 84% of landlords planning to refinance, followed by low upfront fees (63%) and the option for penalty-free early repayment (26%).

Most BTL properties (77%) will be refinanced under personal ownership, while 22% will involve using limited companies.

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