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Buy-to-let lenders are slashing mortgage costs for landlords with substantial deposits, and the race to the bottom on rates may intensify if the Bank of England signals that further rate cuts are likely.
Currently, 31 two-year fixed-rate deals are on offer to property investors at interest rates of less than three per cent.
But some landlords may sit out the temptation until the BoE's rate-setting monetary policy committee meets on Thursday (19/06/2025), when the officials are expected to tweak the 4.25 per cent rate downwards.
Landlords who contribute the most cash to their mortgage deal typically secure the lowest rates.
The keenest buy-to-let mortgage is a 2.49 per cent loan fixed for two years from CHL Mortgages. The mortgage comes with a £150 booking fee and a 7 per cent arrangement fee.
This is how the figures work for the cheapest two-year fixed interest-only buy-to-let mortgages between 65 - 75 per cent loan-to-value (LTV):
| Lender | Fixed rate | Reverts to: | LTV | Deposit | Loan | Monthly payment | Booking fee | Arrangement fee |
|---|---|---|---|---|---|---|---|---|
| CHL Mortgages | 2.49% | 9.24% | 65% | £185,260 | £99,740 | £199 | £150 | £19,950 |
| CHL Mortgages | 2.50% | 9.24% | 65% | £185,260 | £99,740 | £208 | £150 | £19,950 |
| CHL Mortgages | 2.61% | 9.24% | 70% | £199,500 | £85,500 | £186 | £150 | £19,950 |
| CHL Mortgages | 2.64% | 9.24% | 75% | £213,750 | £71,250 | £157 | £150 | £19,950 |
| CHL Mortgages | 2.71% | 9.24% | 75% | £213,750 | £71,250 | £161 | £150 | £19,950 |
| CHL Mortgages | 2.75% | 9.24% | 75% | £213,750 | £71,250 | £163 | £150 | £19,950 |
| The Mortgage Works | 2.75% | 8.24% | 65% | £185,260 | £99,740 | £229 | - | £8,550 |
| Zephyr Homeloans | 2.75% | 9.15% | 65% | £185,260 | £99,740 | £229 | £200 | £19,950 |
| Zephyr Homeloans | 2.84% | 9.15% | 75% | £213,750 | £71,250 | £169 | £200 | £19,950 |
| CHL Mortgages | 2.89% | 9.24% | 65% | £186,260 | £98,740 | £238 | £150 | £19,950 |
Source: Moneyfacts
Landlord borrowers can choose from 2,815 buy-to-let mortgages offered by 80 lenders.
Then, select the cheapest deals and multiply the monthly payment by the number of months in the fixed period, which is 24 for the mortgages in the table. Add the fees and divide by 24 to find the monthly cost, including fees.
For example, the CHL 2.49% fix costs:
£208 x 24 = £4,992. Add the booking and arrangement fees, and the total cost in the fixed-rate period is £25,092 or £2,091 a month.
But although the interest rate is more expensive, The Mortgage Works loan is much cheaper at £25,092 over two years or £1,045 a month.
Borrowers can also calculate the lifetime cost of a loan by deducting 24 months from the term and multiplying by the revert interest rate.
That would be £768 per month for 156 months, over a 15-year term, for the CHL mortgage.
Add the two together, and the total 15-year cost of the CHL loan is £25,092 + £119,808 = £144,900, or £805 a month, including fees.