BTL mortgage rates have soared in 2026 due to ongoing unrest in the Middle East, according to new research from Moneyfactscompare.co.uk.
The average BTL fixed rates for two- and five-year fixed terms has increased since the start of March.
The average rate for two-year fixed products (all LTVs) was 4.66% at the start of March, but as of the 26th has hit 5.29%.
Likewise, the average rate for five-year fixed products (all LTVs) increased from 5.05% to 5.63% over the same period.
This has left rates at their highest level in two years.
Product choice has also taken a hit, with BTL products — fixed and variable, across all LTVs — having fallen from 5,660 at the start of the month to 4,332 on the 26th.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, described the findings as “terrible news” with rates hiked and hundreds of deals pulled from sale.
“The positive sentiment entering 2026 has been shattered, and landlords not only have to face higher borrowing costs, but also prepare themselves for the Renters’ Rights Bill, which comes into effect at the start of May 2026,” said Rachel.
“Those who were to take out a mortgage now compared to the start of this month will face higher repayments of £1,100 more a year.”
Megan Eighteen, president at ARLA Propertymark, sees this as adding more pressure to landlords who are already facing more expenses as they prepare for the Renters Rights Act.
As such, she warned this could force more landlords to exit the sector, thus exacerbating supply constraints in the PRS.
Megan added: “It is essential that the cumulative impact of these changes is recognised.
“A balanced approach is needed to ensure improvements to housing standards can be delivered without discouraging investment or reducing the availability of much-needed rental homes.”
