Buy-to-let mortgage options hit record levels

Two- and five-year fixed rates decline as product choice reaches new high

Buy-to-let mortgage options hit record levels

The number of buy-to-let mortgage products has reached an all-time high, while average two-year fixed rates have dropped below 5% for the first time in nearly two years, according to new research from price comparison site Moneyfacts.

As of June, there are 4,144 buy-to-let mortgage products available — both fixed and variable — marking the highest figure recorded by Moneyfacts since its digital tracking began in November 2011. The increase is being driven largely by five-year fixed offers, which now outnumber two-year deals.

Fixed-rate pricing has also continued to ease. The average two-year fixed rate for buy-to-let loans has fallen for the fourth month in a row and now sits at its lowest level since September 2022. The average five-year fixed rate has dropped to its lowest point since October 2024.

“Landlords searching for a new buy-to-let mortgage may be pleased to see a rise in product availability, with the choice of deals soaring to its highest point on record,” said Rachel Springall, finance expert at Moneyfactscompare.co.uk.

“Borrowers concerned about interest rates may also find it encouraging to see the average two-year fixed buy-to-let rate has fallen below 5% for the first time since September 2022 and both the two- and five-year fixed rates have fallen for the fourth consecutive month,” she said.

Despite more competitive rates, landlords are still facing pressure on profit margins. Springall noted that energy efficiency standards and ongoing regulatory reforms could limit viability for some investors, especially those with a single property or accidental landlords facing upgrade costs.

“Landlords must ensure their property has a minimum Energy Performance Certificate (EPC) rating of ‘C’, by 2030 at the latest, according to the government’s latest proposals,” she added.

She also pointed to location strategy and potential tax and compliance issues as key considerations for new investors, particularly those looking to purchase through limited companies or expand portfolios.

Springall said rising rents could help offset costs, especially for those refinancing from older, lower-rate deals. However, she warned that upcoming changes under the Renters’ Rights Bill — such as the end of section 21 evictions and limits on rent increases — could prompt some landlords to exit the market.

“It is also vital for prospective investors to weigh up the costs involved in entering the buy-to-let market, such as the minimum 5% surcharge on Stamp Duty Land Tax (SDLT),” she said. “An investment in property is more than aiming for a monthly profit, it’s important to understand the longer-term returns of selling the asset, and the tax implications of selling up.”

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