The majority of landlords are set to choose five-year fixed rate when they come to remortgage, while interest grows in both two-year and tracker options, new survey data from Landbay shows.
More than half of landlords (57%) said they will choose a five-year fixed rate when they come to remortgage - a drop from 71% this time last year. In those 12 months, landlord preference has shifted with greater interest around two-year fixes – the preferred choice for 29% of landlords. This is an increase from two-in-ten in 2024.
Perhaps reflecting expectations around interest rates, 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 remains the same with 6% of landlords stating this as their preferred pick.
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.
Rob Stanton, sales and distribution director at Landbay, 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 buy-to-let 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. Our product transfer offering is a great example of the innovation we are seeing in the market to provide options to landlords. It’s not just about giving them a safe landing, but the confidence to continue in the market or even to expand further – particularly with the addition of additional borrowing to our PT proposition.”
