Portfolio landlords who do not refinance their buy-to-let (BTL) mortgages could see costs rise by over £23,000, according to research from Rangewell.
The research found that two years ago, the average portfolio landlord owned 8.6 properties with 5.8 loans, owing £503,680 in BTL mortgage borrowing.
At that time, the average 2-year fixed rate at 75% loan-to-value (LTV) was 4.78%, making monthly interest-only payments £2,006.
With mortgage rates now improved, the same landlord could secure a 3.93% rate when refinancing, reducing monthly payments to £1,650.
Over two years, that’s a saving of £8,563.
Landlords who do not refinance and instead move onto a standard variable rate would see their rate rise to 7.09%.
This would push their monthly payment up to £2,976, £970 more each month, an increase of £23,270 two years ago.
Alasdair McPherson, head of partnerships at Rangewell, said: “The mortgage market has moved decisively back in favour of portfolio landlords – but the gap between best-in-market rates and legacy rates that landlords can fall into through lack of research or professional funding support is now dangerously wide.
“For portfolio investors, this isn’t just about individual savings – it’s about managing cash flow on a property by property basis, leveraging equity to grow the portfolio, and avoiding thousands in unnecessary cost.”
McPherson said lenders were now much more interested in semi-commercial properties, such as flats above shops, and noted that mixed-use portfolios could often get better refinancing terms than those with only residential properties, especially if retail income helps balance out lower returns from the residential side.
He also said holiday let portfolios had always offered good yields, but getting finance used to be more difficult.
McPherson noted that more lenders are now willing to work with landlords who manage holiday lets well, which can mean lower costs and the chance to release equity for new purchases.
On supported living and social care properties, McPherson said these portfolios used to be a challenge for many landlords because lenders didn’t always understand the business model.
He pointed out that there are now more specialist lenders in the market who know this sector, making it easier to refinance and expand.
McPherson noted that overseas landlords with UK property have typically paid higher interest rates because they didn’t have a UK credit history.
He said more lenders are now recognising this landlord group and offering better terms, so foreign investors have more options to refinance and improve their portfolios.
Additionally, he said lenders are showing strong interest in houses in multiple occupations (HMOs), especially for properties aimed at professionals and students where rental income covers the loan comfortably.
McPherson noted that with the right set-up, landlords can get rates similar to standard BTL, which could boost returns.
For multi-unit freehold blocks (MUFBs), McPherson said these properties, particularly those with five or more self-contained flats under one title, remain popular with lenders.
He added that with the right rental income and valuation, it’s often possible to secure rates close to standard BTL even for larger blocks.
