Fixed rate expiries fuel buy-to-let refinancing surge
Landlord research carried out by mortgage market specialist Pegasus Insight shows a major wave of refinancing among buy-to-let landlords, driven by the end of fixed-term deals and shifting portfolio strategies. Of those refinancing, over two-thirds stayed with their existing lender; one in three remortgaged and one in three took a product transfer. One in four remortgaged to a different lender, with that proportion rising to 37% among landlords with 11 or more rental properties, indicating a greater willingness to shop around among experienced operators managing larger portfolios.
The majority of landlords (64%) said they did not face any challenges when their buy-to-let mortgage came to the end of its fixed term, while of the 36% who did face a challenge, higher interest rates, higher fees and problems with valuations were the major obstacles.
Most began the process of securing a new deal three to six months before the end of their fixed rate (61%), although those staying with the same lender tended to leave it closer to the deal end.
Looking ahead, 40% of leveraged landlords say they will remortgage or take a product transfer in the next 12 months. This rises to 53% among portfolio landlords with four or more buy-to-let mortgages. On average, landlords expect to refinance 2.4 loans each – rising to around three loans among larger portfolio holders (with an average of 9.8 mortgages).
For landlords planning to refinance, the most valued criteria for a new deal are competitive interest rates (84%), low upfront fees (63%), followed by the ability to repay early without penalty (26%). Reflecting the existing ownership landscape, 77% of properties will be refinanced in a personal name, and 22% in a Limited Company.
Bethan Cooke, director at Pegasus Insight, commented: “The expiry of fixed rates has created a refinancing flashpoint, particularly for portfolio landlords faced with multiple mortgages maturing within a short timeframe. These landlords are pragmatic and commercially focused; the data suggests that they are more likely to seek out competitive terms from new lenders, weigh up incorporation strategies and look for support managing their refinancing pipeline efficiently.
“Refinancing is not just a transactional moment, it’s a strategic inflection point for many landlords. With margins under pressure and confidence still fragile, landlords are thinking carefully about their costs and looking for product flexibility. For portfolio landlords in particular, this is about streamlining complexity and making their finance work harder. That’s where brokers can add real value, not just in sourcing deals, but in helping landlords structure their borrowing for the long term.”