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Buy-to-let (BTL) mortgage rates have been falling over the past few months, with the average rate at 5.15% in June.
The cuts have been driven by the Bank of England dropping the base rate from 4.75% to 4.25% on 8 May.
Here, Which? explains what's happening to BTL rates and reveals the cheapest deals currently on the market.
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The average BTL mortgage rate fell for much of the 2024. However, between October 2024 and February 2025 it actually increased from 5.25% to 5.49%.
Since February the tide has turned, with the average rate falling every month.
The June average, 5.15%, is lower than the 5.81% recorded two years ago, but well above the 2.82% recorded five years ago.
This means the term length of your last fixed-rate deal will dictate whether you are better or worse off when you come to remortgage your property.
Landlords coming off a two-year fixed-rate mortgage may actually find their mortgage costs fall. However, those coming off a five-year fixed-rate mortgage will see their costs rise significantly.
The graph below shows what's happened to fixed BTL mortgage rates over the past year.
In April, lenders began pricing in additional base rate cuts, which led several to lower their buy-to-let mortgage rates. This shift was driven by tariffs announced by President Trump and concerns they could slow economic growth.
However, lingering inflation has cast doubt on whether those extra cuts will go ahead.
At present, most experts expect just one or two more base rate reductions this year. Although, as recent years have shown, forecasts can change quickly in response to global events.
There are currently around 4,129 BTL mortgages on the market. Most are available to landlords with deposits of at least 25%, though some higher loan-to-value deals are available.
Looking at average rates gives us a general idea of what's happening in the market, but when you're taking out a mortgage you'll want to get the cheapest deal you can.
The tables show the lowest initial rates currently available on two-year and five-year fixed-rate buy-to-let mortgages.
These rates are significantly more attractive, but there are drawbacks. The cheapest deals here come with substantial upfront fees, which you'll need to factor in when comparing overall costs.
For example, the lowest-rate 60% mortgage has a fee of 3% of the amount you borrow, so if you borrow £200,000, you'll need to pay a fee of £6,000.
Fee-free BTL mortgages are less common, making up just 11% of deals, but some deals do come with lower upfront fees of around £999-£1,500.
| 60% | The Mortgage Works | 2.79 | 8.24 | Arrangement 3% Advance |
| 75% | The Mortgage Works | 2.99 | 8.74 | Arrangement 3% Advance |
| 80% | Molo Finance | 3.93 | 6.94 | Arrangement 4.5% Advance |
Source: Moneyfacts. Rates correct as of 3 June 2025. Deals with up-front fees of more than 5% of the amount borrowed and 'green' deals aren't included.
| 60% | The Mortgage Works | 3.74 | 8.24 | Arrangement 3% Advance |
| 75% | The Mortgage Works | 3.84 | 8.74 | Arrangement 3% Advance |
| 80% | Accord Mortgages | 4.69 | 7.49 | None |
Source: Moneyfacts. Rates correct as of 3 June 2025. Deals with up-front fees of more than 5% of the amount borrowed and 'green' deals aren't included.
Research from Hamptons found that there has not been a mass sell-off of buy-to-let homes.
Instead, landlords have created limited companies. Hamptons found that a record 61,517 landlords created limited companies last year, up 23% from 2023.
Landlords using company structures can offset 100% of their mortgage interest against their profits and pay corporation tax rather than income tax. However, mortgage rates for limited companies can be significantly more expensive.
Although droves of landlords are not selling up, Hamptons does note that there are fewer new landlords.
