Five-year fixed rates still preferred by the majority of landlords when remortgaging, survey reveals

15 August 2024

Buy-to-let landlords continue to favour the stability of a fixed-rate mortgage, with the majority set to choose a five-year fixed rate when they come to remortgage, new survey data from Landbay can reveal.

When asked for their loan of choice when they come to remortgage, 71% of landlords said they’ll choose a five-year fixed rate mortgage – a sizeable increase from 49% in Landbay’s previous survey last year. Two-in-ten landlords are set to opt for a shorter two-year fixed rate, a drop from a third in the previous survey.

Perhaps surprisingly, longer-term fixes of seven or 10 years saw a slight increase in preference, with 6% of landlords set to choose this option – up from 4% last time. Variable tracker rate mortgages are less popular than last year, with just 3% of landlords set to make this choice – a fall from 14% in 2023.

Of those planning to choose a five-year fixed rate, the majority is made up of those operating within limited companies (71%). At 42%, landlords with portfolios between four and 10 properties made up the biggest share of those opting for a five-year fix, followed by nearly a quarter of landlords with portfolios of 20 properties or more (24%).

The findings form part of Landbay’s latest survey which questions existing landlords on a variety of topics to determine their attitude and intentions. The survey uncovered the key factors facing landlords and their thoughts on upcoming regulation and the future of the buy-to-let market.

Rob Stanton, sales and distribution director at Landbay, said: “The topic of mortgage maturity is regularly discussed in the residential market, but we mustn’t forget the many landlords set to remortgage too. As we have seen in previous years, our data shows that fixed-rate products continue to be the product choice for many, providing that welcome stability in a challenging market and climate.

“It is interesting to see a decline in demand for trackers, particularly as we enter a period where we could see further movement on base rate, and in turn on mortgage rates. This, along with a small increase in demand for longer-term fixes may highlight that some landlords are still a little way off from remortgaging and are hoping to make their move during more favourable market conditions.

“It’s an important reminder that brokers need a broad range of products at their disposal to support a broad range of requirements among their landlord clients. This has been a primary focus at Landbay, making sure we have options to support all requirements, whether it’s trackers, two-year or five-year options – in addition to our like-for-like range to support those with no change to their current borrowing requirements.”