Majority of BTL landlords choose five-year fixed-rate mortgage for stability

More than half (57%) of buy-to-let (BTL) landlords are set to choose a five-year fixed rate when they come to remortgage.

The research by Lender Landbay reveals this is a drop from 71% this time last year, as two-year fixes gain greater interest.

Tracker mortgages have also grown in popularity, offering landlords more flexible options amid economic uncertainty.

Landlords with portfolios between four and 10 properties choose a five-year fixed rate

According to Landbay, of those planning to choose a five-year fixed rate, the biggest majority (29%) is made up of landlords with portfolios between four and 10 properties, closely followed by those with between 16 and 30 rental properties, at just over a quarter (26%).

Among those looking for a medium-term fixed rate, the majority of their portfolios can be found in London and the South East.

The data also reveals tracker mortgages have also grown in preference, with 8% of landlords set to choose this option.

This is an increase from 3% in 2024, but still not as high as 2023, where roughly one-in-seven landlords (14%) made this their preference. Longer-term fixes of seven or 10 years remain the same with 6% of landlords stating this as their preferred pick.

The data also shows growing interest in two-year fixes, with 29% of landlords opting for them, up from two-in-ten in 2024.

Overwhelming majority continue to favour the stability of a fixed-rate mortgage

Rob Stanton, sales and distribution director at Landbay, says the majority of landlords prefer fixed-rate mortgages.

He said: “While the data has shown an increase in interest around tracker mortgages as some landlords look to ride the wave of potential interest rate cuts, the overwhelming majority continue to favour the stability and certainty of a fixed-rate mortgage. Above all, it serves as a reminder why it’s important that lenders offer a broad range of options to enable brokers to best support those landlords set to refinance.

“While the conversation around mortgage maturity continues to centre around the residential market, we cannot overlook how much of a factor this is in the BTL sector too. While those with shorter-term fixes may be set for some relief this year, we cannot forget those set to come off more favourable deals and a time of higher operating costs for landlords.”

For assistance with any type of buy-to-let (BTL), property or commercial finance please complete the contact form below: