By As we entered 2026, the trajectory for Buy-to-Let (BTL) mortgage rates appeared to be on a clear downward path.
After several Bank of England base rate cuts over the past 12 months, dropping from 4.75% to 3.75% in February, landlords and property investors finally saw some respite from the high cost of borrowing.
However, the landscape is shifting.
Ongoing conflict in the Middle East and the looming threat of energy-driven inflation are beginning to alter forecasts. While we entered the year with optimism, the prospect of further base rate cuts in 2026 is now under intense scrutiny.
Bank of England Holds Interest Rates
Surging oil prices due to the war in the Middle East will mean higher inflation, which in turn prevents the Bank of England from cutting the base rate as previously planned.
Since February 2025, BTL rates have trended downward, with the most significant drops occurring early last year. However, the stability of the past few weeks is being tested by international volatility.
As of 19 March 2026, the Bank of England opted to hold the base rate at 3.75%.
While a hold isn’t an increase, the accompanying messaging from the Monetary Policy Committee (MPC) suggests a “wait and see” approach, agreeing that they’d have more information about the conflict at its next meeting in April.
But what does this mean for landlords who are looking to remortgage or invest in a new buy-to-let property this year?
Buy-to-Let Remortgaging in 2026
According to Paragon Bank, around 1.8 million mortgages are due to expire this year, with an estimated £49 billion of that tied up in buy-to-let loans.
For landlords, your pain point depends entirely on your existing mortgage’s terms and its timing.
Many landlords are coming off five-year fixed deals secured in 2021 when rates were near historic lows (under 2%). Transitioning from a 1.8% rate to a +5% rate could see monthly interest payments nearly triple.
Given that rates have been falling over the last 12 months, those coming out of a two-year fixed-rate mortgage may see their mortgage costs fall.
Market Volatility
Data from Moneyfacts published by Property118.com reveals a sudden tightening of the market.
The number of buy-to-let mortgage products fell from 5,660 on 1 March to 5,081 by 12 March, marking a drop of 579 deals across fixed and variable mortgages.
While the Bank of England’s decision to hold rates provides a baseline of stability, the mortgage market itself remains in flux. Moneyfacts has also reported that average mortgage rates have begun to creep upward as lenders price in the expectation that base rate cuts are off the table for the foreseeable future.
The firm’s latest data shows the overall average mortgage rate rose from 4.97% to 5.04% as of 11th March. Average two-year fixed rates have climbed to 5.01%, while five-year deals, often the preferred choice for stability-seeking landlords, now average 5.09%.
Landlords looking to refinance or secure a new BTL mortgage deal are now facing a shrinking pool of mortgage choices as lenders respond to market volatility linked to the Middle East.
Demand Remains Resilient
Despite the uncertainty across the mortgage market, data currently indicates that professional investors are not exiting the market.
According to Twenty7tec’s Mortgage Market Snapshot, advisers conducted 291,468 BTL searches last month.
While this is 4% lower than January, it remains 2% higher than the same period in 2025.
In light of recent events, many savvy landlords are actively getting ahead, reassessing their portfolios to mitigate the impact of rising costs, with remortgage searches having increased by 8% year-on-year.
What’s Next for BTL Mortgages?
For UK landlords, a wait and see BoE policy is a double-edged sword. While it prevents immediate rate hikes, it eliminates the relief of cheaper borrowing that was expected this year.
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