Your fixed rate is ending, or you’re about to buy, and you want to know what you’ll pay. Buy-to-let rates have just been through the sharpest cycle in a generation. From sub-2% fixes in 2021, rates peaked at 6%+ in late 2023, then eased through 2024–25 as the Bank of England cut Base from 5.25% down to 3.75% by mid-2026.
This is a practical 2026 guide for landlords: what rates look like right now, how lenders stress-test your ICR (interest cover ratio), whether to fix for 2 or 5 years, and the real cost of product fees.
Disclaimer: rates quoted are indicative mid-2026 snapshots for information only. Speak to a specialist BTL broker for personalised quotes.
BTL mortgage rates in mid-2026
Indicative rates at 75% LTV on a standard BTL on a £250,000 loan:
| Product | Typical rate (mid-2026) | Product fee |
|---|---|---|
| 2-year fix | 4.7–5.4% | £995–£1,999 |
| 5-year fix | 4.4–5.1% | £995–£1,999 |
| Tracker (Base + 0.6–1.0%) | ~4.35–4.75% | £495–£1,499 |
| 2-year fix, percentage fee (3%) | 4.0–4.4% | 3% of loan |
HMO / holiday-let / expat products sit 0.3–0.7% higher across the board.
Bank of England Base Rate: 3.75% at the time of writing (June 2026). Check the Bank of England’s latest decision before you rely on it, and plan for rates that could move either way before your next remortgage.
From £7.99 a month, LetCompliance, buy-to-let portfolio software that also tracks the rent and the costs, holds each property’s mortgage end date and reminds you 90 and 30 days before the deal ends, which is when the comparisons below start to matter. Get started
Interest Coverage Ratio (ICR) stress tests
Every BTL lender stress-tests rent vs notional mortgage payment. The standard PRA-guided formula:
Rent × 12 ≥ ICR × Loan × Stress rate
Common ICR values by borrower type:
| Borrower type | ICR | Stress rate |
|---|---|---|
| Basic-rate individual, 5-year fix | 125% | pay rate (if ≥5.5%) or 5.5% |
| Higher-rate individual | 145% | 5.5% (or pay rate +2%) |
| Limited company | 125–145% | 5.5% |
| HMO / holiday let | 145% | 5.5–7% |
Quick example
Higher-rate landlord, 5-year fix, £250,000 loan:
- Required annual rent = 145% × £250,000 × 5.5% = £19,937/year = £1,661/month
If your property rents at £1,500/month, you fail ICR and the lender declines. You’d need to borrow less (£225,000 or lower) or find a more generous lender.
Shortcut tool: use the BTL mortgage stress test calculator to run the figures instantly.
2-year vs 5-year fix vs tracker, which wins in 2026?
5-year fix arguments
- Lower headline rate (typically 0.3–0.5% below 2-year)
- Lower stress rate on ICR (pay rate if ≥ 5.5%), so more borrowing headroom
- Certainty through the next general election cycle
- Fewer refinances, so fewer product fees
2-year fix arguments
- If Base falls, you capture those cuts sooner
- Flexibility for portfolio pivots (sell, incorporate, refinance)
- Typically £100–£300 lower product fee
Tracker arguments
- Full Base-rate transparency
- Cheapest when cuts arrive quickly
- Usually fee-free or low-fee
- Downside: payment volatility
2026 skew
Through early 2026, with cuts expected, many landlords leaned to 2-year fixes or trackers on the view that 2028 remortgage rates could be meaningfully lower. Nobody knows where Base will be at your next remortgage, and the certainty of a 5-year fix has a value of its own. There is no free lunch either way. This is speculation, not advice.
Product fees: the hidden cost
On a £250,000 loan, a 3% product fee (e.g., for a lower headline rate) = £7,500 added to the loan. Spread over a 2-year fix, that’s £3,750 a year in amortised cost (1.5% of the loan).
Effective rate check: take the headline rate + amortised fee / year / loan.
Worked example
| Product | Rate | Fee per year | Effective rate (over the fixed term) |
|---|---|---|---|
| 5-year fix, 4.4% + £999 fee | 4.4% | 0.08% (£999 / 5 / £250k) | 4.48% |
| 2-year fix, 4.0% + 3% fee | 4.0% | 1.5% (£7,500 / 2 / £250k) | 5.50% |
The "cheaper" headline rate is actually more expensive after fees. Always model the all-in cost.
Personal vs limited-company BTL in 2026
Three forces make this decision harder than pre-2020:
- 1SDLT additional-property surcharge raised from 3% to 5% (Oct 2024), and it applies equally to both
- 2Corporation tax at 25% on company profits over £250,000 profits (effective rate; 19% on first £50k)
- 3Mortgage interest: fully deductible in a company (good); only 20% basic-rate credit (22% from 2027-28) for individuals (bad for higher-rate payers)
Break-even rough guide
For a higher-rate (40–45%) taxpayer, limited-company BTL typically becomes more tax-efficient at 3–4+ properties. Below that, personal often wins once you factor in:
- Higher mortgage rates in ltd-co (0.3–0.7%)
- Accountancy fees (£400–£1,200/year extra for the co)
- Dividend tax on profit extraction
Always run the numbers with an accountant. Rough planning, specific advice.
FAQs
My 5-year fix from 2021 at 2.2% is ending in 2026. What will my new rate be?
Assuming 75% LTV and higher-rate individual: expect ~4.4–5.1% on a new 5-year fix, or ~4.7–5.4% on a 2-year. Your monthly payment on £250k interest-only will roughly double (from ~£458 to ~£960).
Can I remortgage with a different lender to get a better rate?
Yes. When your product ends, free standard conveyancing is usually included. Your broker compares whole-of-market. The ICR stress test still applies at the new lender.
What if I don’t pass the ICR on remortgage?
Options: (1) switch to product transfer with your existing lender (skips stress test), (2) inject cash to reduce the loan, (3) look at specialist lenders with more generous ICRs (e.g., those using 125% ICR for 5-year fixes), (4) review whether to sell (see the CGT guide).
Are HMO mortgage rates worse?
Yes, typically 0.3–0.7% above standard BTL. Specialist HMO lenders: Paragon, Precise, Landbay, Kent Reliance, Shawbrook.
Where to go next
- BTL mortgage stress test calculator: run your ICR in a minute
- Buy-to-let tax UK 2026: personal vs company tax, side by side
- CGT on buy-to-let 2026: if the remortgage sums don’t work, should you sell?
Get started, from £7.99 a month. A remortgage goes more smoothly when the figures for the let are already in one place. LetCompliance keeps each property’s mortgage product end date and a current valuation estimated from the HM Land Registry House Price Index, so you can see your equity and your LTV band before you call a broker. The rent ledger shows what the property actually brings in, and profit and loss per property feeds your SA105 tax pack and the MTD quarterly updates it sends to HMRC (LetCompliance is recognised by HMRC for Making Tax Digital). The Section 24 calculator shows what a new rate does to your tax bill.
Sources and scope
- Bank of England: Official Bank Rate history
- FCA: Mortgages conduct of business (MCOB)
- PRA: Supervisory statement SS13/16 (BTL underwriting)
- GOV.UK: Stamp Duty Land Tax on additional property
Every figure on this page is cited to GOV.UK, legislation.gov.uk or HSE and reviewed against the live source every quarter. This is guidance, not individual legal advice.
Allowable vs Capital Repair Decision Tree
The single line HMRC actually draws between an allowable repair and a capital improvement, with 24 worked examples for UK landlords.
- 24 real repair scenarios classified
- Repair-vs-capital decision tree (1-page A4)
- Replacement-of-domestic-items relief explained
- Self Assessment line mapping for SA105
Frequently asked questions
What are typical BTL mortgage rates in 2026?
Spring 2026 indicative rates on 75% LTV BTL: 2-year fix 4.7–5.4%, 5-year fix 4.4–5.1%, tracker Bank Base + 0.6–1.0% (so ~4.35–4.75% with Base at 3.75% at the time of writing). Specialist / HMO products typically sit 0.3–0.7% higher. Product fees are £995–£1,999 for standard BTL, or percentage-based (1–3% of loan) for lower headline rates.
How do lenders stress-test my BTL mortgage in 2026?
Most lenders use an Interest Coverage Ratio (ICR) test: rent must cover 125% of the notional stressed payment for basic-rate taxpayers and 145% for higher-rate borrowers (125–145% for limited companies), at a stress rate of 5.5% (5-year fix) or the pay rate +2%, whichever is higher. The free BTL mortgage stress test calculator runs the numbers for your situation.
Is a 2-year fix or 5-year fix better in 2026?
5-year fix: lower rate (easier to pass ICR test thanks to lower stress rate), payment certainty, no early-repayment risk if rates rise. 2-year fix: higher rate but flexibility to remortgage if rates fall further. If you think rates will fall, a 2-year fix or tracker lets you capture cuts sooner; if you value certainty, a 5-year fix gives it. Check your personal circumstances with a specialist broker.
Should I buy through a limited company or personal name in 2026?
For higher-rate taxpayers with multiple properties, limited-company BTL usually wins on after-tax return because mortgage interest is fully deductible at corporation-tax rate (19–25%), vs the 20% credit (22% from 2027-28) for personal BTL. But SDLT surcharge (+5% from Oct 2024), higher mortgage rates (+0.3–0.7%) and corporation-tax plus dividend tax eat into the advantage. Break-even is typically at 3–4+ properties for a higher-rate landlord. Always take accountant advice.
