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Buy to Let Fixed Rate Mortgages

An easy guide to fixed rate buy to let mortgages in the UK.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 6th September 2019 *

Considering a buy to let (BTL) fixed rate mortgage? We’ve put together this easy guide to help get you started. Read on to find out what kind of fixed buy to let mortgage might be right for you.

In this article we will cover:

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What is a fixed rate buy to let mortgage?

A buy to let (BTL) mortgage is a property investment product which allows a buyer to become a landlord with an aim of renting the mortgaged property out for profit. 

A fixed rate mortgage for buy to let means the interest rate is set for a specific period of time, usually five years but it’s possible to get a ten year fixed rate and sometimes lenders will offer an even longer fixed term.

While this article focuses on fixed rate mortgages for buy to let, lenders also offer variable rate and tracker deals. 

3 keys things about Buy to Let mortgages, fixed rate or otherwise:

  1. Most fixed rate buy to Let mortgages are offered on an interest only basis. The borrower settles the monthly interest payment from the rental payments generated by the property
  2. The minimum salary requirement for a BTL mortgage is usually between £20,000 and £25,000, although some lenders have no minimum salary requirement
  3. While residential mortgages are assessed based on your personal financial circumstances, buy to let mortgages are based on the profitability of the property

The three most popular types of fixed buy to let mortgage deals offered to borrowers are two year fixed rate mortgages, five year fixed rate mortgages and ten year fixed rate mortgages.

Two year fixed rate buy to let mortgages

Two year fixed rate BTL mortgages are offered by many lenders. 

They’re a popular choice because the shorter period covered by the fixed rate means lenders offer more competitive interest rate deals on two year fixed rate mortgages than you might find with a five or ten year fixed rate buy to let mortgage deal.

The other advantage of a shorter two year fixed rate mortgage term is that you’re less likely to fall into the trap of having to pay an early repayment charges should your circumstances change.

Five year fixed rate buy to let mortgages

Most lenders offer five year buy to let fixed rate mortgages so there are many deals on offer. As with two year fixed rate mortgages, this is also a popular choice. With a wealth of opportunity, it’s worth shopping around to find the best fixed buy to let mortgage for you.

If you want to save yourself time and effort, talk to an expert in fixed rate buy to let mortgages. The specialists we work with have whole of market experience and are well positioned to find you the best fixed buy to let mortgage rates.

Ten year fixed rate buy to let mortgages

Some lenders offer buy to let mortgages with a fixed rate of ten years. 

Locking in a fixed interest rate for a decade may seem tempting, but you’d probably need to know the interest rate being offered to decide if it  would be a good idea for you and know if it suits your longer term goals.

A decade-long fixed rate you are comfortable with may seem like a great idea but be aware that you might be trading potential flexibility for the security of knowing a fluctuating interest rate can't impact you or your finances.

The best fixed rate buy to let mortgage might be one where a lender only applies an early repayment charge for the first five years. 

It is also possible to get a fixed rate buy to let remortgage deal.

If you are interested in learning more about five, ten or long term fixed buy to let mortgages, and want to speak to an expert, get in touch. The specialists we work with cover whole of market, putting them in a great position to know exactly where to go for the best fixed rate buy to let mortgages in the UK.

Give us a call on 0808 189 2301 or make an enquiry and we’ll put you in touch with someone who can take you smoothly you through the process of securing the best fixed rate buy to let mortgage for you. 

What is the longest fixed rate buy to let mortgage I can get?

A ten year fixed rate mortgage would generally be classed as a long term fixed rate buy to let mortgage.

As discussed in the section above, tying into a guaranteed fixed interest rate for a decade may seem tempting, but you’d probably need to know the interest rate being offered to decide if it  would be a good idea for you and know if it suits your longer term goals.

It’s also worth noting that shorter fixed terms often come with lower fixed interest rates.

Can I remortgage a fixed rate buy to let mortgage?

Yes, and There are plenty of reasons why you might want to remortgage your buy to let property.

Reasons might include:

  • You want to raise money against your existing property
  • Switch your mortgage to a more favourable interest rate
  • Change the terms of your mortgage

Whatever your reasons for wishing to remortgage, you should find several available options. 

If your current mortgage is a fixed rate mortgage, be aware that you could be subject to an early redemption charge or ERC where a lender will apply a fee if you wish to exit your mortgage within a specified early period of the agreement. Almost all lenders will apply this charge even if you wish to pay the mortgage in full.

You will need to read the terms of your current mortgage agreement to get a clear idea of any potential charges which might be applied if you go ahead with a remortgage.

Call us on 0808 189 2301 or make an enquiry and we’ll put you in touch with an expert in fixed rate buy to let remortgages who will be happy to tell you about the possible options for your circumstances.

Advantages and disadvantages of a  buy to let fixed rate mortgage

As with any long term financial decision, it’s wise to weigh up the pros and cons of what you might be committing to before signing on the dotted line.

On the plus side...

  • A  buy to let mortgage with a fixed rate can offer peace of mind. Knowing what your mortgage will cost you from month to month may be reassuring, whether being a landlord is new to you, or you’re an experienced landlord, taking on a new property might come with issues you can’t control. Knowing you have a grip on your monthly interest might be just the thing to keep you on a sound footing.
  • If your buy to let fixed rate mortgage is on a new property it may take time to get a clear understanding of the associated running costs. A fixed rate can give you peace of mind since you can rely on the mortgage costs not running out of control.
  • You can also gain tax benefits from your buy to let properties. It’s possible to reclaim some of the running costs associated with buy to let properties, including interest on your mortgage repayments. (Also, letting agent fees, repair costs, council tax and other bills, if you’re paying them yourself, can also be tax deductible.)

Potential disadvantages include… 

  • While a fixed rate buy to let mortgage means you know exactly what your mortgage costs are each month, you may be foregoing flexibility in favour of certain fixed monthly costs.
  • Whatever type of buy to let mortgage you take on, there’s always the risk of your rental property standing empty. Because there’s no guarantee your property will be occupied 100% of the time, you could end up paying the cost of the mortgage from your own pocket, so it’s wise to make sure you have insurance to cover this eventuality, or to ensure you could potentially afford to pay the mortgage yourself.
  • With any fixed rate mortgage you should be aware of the Early Repayment Charge or ERC. Most lenders apply this charge in the event that you want to exit your fixed rate mortgage early.

Although the way this charge is applied varies from lender to lender, the early repayment charge is usually between 3-5% of the loan amount. For fixed terms between two to five years, it can even be between 1-5%. Generally, the longer the fix and the earlier you exit, the higher the ERC will be. For 10-year fixes, this charge may be even higher. 

Some lenders might charge fees even if you only want to change the amount you are borrowing while you’re still in the early repayment charge period. This applies if you’re reducing the mortgage, and the ERC would only be payable on the amount paid off, not the whole mortgage amount. 

You will need to read your mortgage agreement small print or contact your mortgage lender to find out specific charges and how any early repayment charge might impact your decision to exit your fixed rate buy to let mortgage early.

How to get the best fixed rate buy to let mortgages

There are many lenders offering fixed rate buy to let mortgages and there are various deals available. To find the best fixed rate buy to let mortgage for you, speak to an expert.

The specialists we work with know about the full range of BTL mortgages and can pick from the best buy to let fixed rate mortgages across the whole market, saving you a whole lot of leg work. Give us a call on 0808 189 2301 or make an enquiry.

To get the best rates possible you will need to meet the lender’s eligibility requirements as closely as possible. The experts we work with have strong knowledge about what lenders are looking for in potential borrowers and can save you time by understanding your situation and matching you up with the right lender..

With whole of market experience, the advisors we work with can save you time, money and potential marks on your credit record which could add up if you end up shopping around and talking to list of potential lenders.

Try out our fixed rate buy to let mortgage calculator 

Take a look at our buy to let mortgage calculator and see what you could borrow. The calculation will give you approximate figures for the amount you might be able to borrow based on property value, based on your rental income and what rental income you will need for the mortgage you want.

The calculator is designed to give you a rough indication of what you might be able to expect to borrow. To get a more definitive guide as to what you could borrow with a fixed buy to let mortgage speak to one of our experts. 

The advisors we work with are whole-of-market and can introduce you to the lender whose buy to let calculator is most likely to return favourable results for a borrower with your exact profile.

Speak to an expert in fixed buy to let mortgages

If you like what you’ve learned here and want to take the next step, talk to someone about which buy to let mortgage with a fixed rate might be best for you.

The experts we work with are experienced in buy to let mortgages with a fixed rate and cover the whole market. Give us a call on 0808 189 2301 or make an enquiry and we’ll put you in touch with a specialist who knows about all the best fixed rate buy to let mortgage deals.

Updated: 6th September 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.