12:00 AM, 30th March 2026, 2 weeks ago
Buy to let borrowing costs have rocketed since the start of March, with fixed mortgage rates reaching their highest levels in over a year as market volatility intensifies.
Data from Moneyfactscompare.co.uk shows the average two-year fixed rate has risen to its highest point since February 2025 at 5.40%.
The average five-year deal now stands at 5.91%, a level last seen in January 2024.
The increases follow turbulence linked to unrest in the Middle East, which has fed through to residential lending markets.
Terrible BTL mortgage news
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Soaring borrowing costs will cause pain to landlords this year, as they join millions of consumers facing higher mortgage repayments.
“This is terrible news, as rising costs could lead to higher rental payments for tenants, or a drop in the pool of properties available for rent if landlords decide enough is enough and sell off their portfolio.
“The unrest in the Middle East has caused absolute mayhem in the residential mortgage market, buy to let rates are also being hiked, and hundreds of deals have been pulled from sale.”
She added: “The positive sentiment entering 2026 has been shattered, and landlords not only have to face higher borrowing costs but also prepare themselves for the Renters’ Rights Bill.”
BTL products dry up
Landlords taking out a two-year fixed deal are facing much higher repayments and on a £250,000 loan over 25 years, annual costs are now £1,100 higher than at the start of March.
That’s based on a rate of 5.29% compared with 4.66%.
Product availability has also tightened with the number of buy to let mortgage deals, across both fixed and variable rates, falling by around 1,300 since early March.
That has seen landlord BTL choice dropping to below 5,000 products for the first time since November 2025.
Rising costs affecting rents
Propertymark says the combined effect of higher borrowing costs and regulatory pressure is already being felt across the sector.
Its president Megan Eighteen said: “Rising buy to let mortgage rates will place significant additional pressure on many landlords at a time when they are already grappling with substantial regulatory and cost burdens.
“Increased borrowing costs, combined with reduced product choice, risk undermining confidence in the sector and could ultimately restrict the supply of homes in the private rented market.
“With landlords also preparing for the introduction of the Renters’ Rights Act and facing potentially high costs to meet future EPC requirements, there is a real concern that some may reassess their position and exit the market altogether.”
Ms Eighteen says the cumulative impact of the changes must be recognised so landlord investment is not discouraged.
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