The buy-to-let market is changing, but one thing remains constant: landlords are still looking for stability when it comes to their mortgages. A new survey by Landbay shows that 71% of landlords are planning to go with a five-year fixed rate mortgage when they remortgage, up from 49% last year.

Why Are Landlords Choosing Fixed Rates?

It’s no surprise that landlords are opting for fixed rates. These mortgages give you peace of mind by locking in your interest rate for a set period. This means you know exactly how much your monthly mortgage payments will be for the next five years, even if interest rates rise in the wider market. This stability is especially important for landlords, who rely on their rental income to cover their mortgage payments.

The Shift Towards Longer Fixed Rates

The survey also showed a slight increase in landlords choosing longer fixed rates of seven or 10 years, with 6% opting for this option.

Tracker Mortgages Losing Popularity

The number of landlords choosing tracker mortgages has fallen dramatically from 14% last year to just 3% this year. Tracker mortgages are linked to the Bank of England base rate, so your monthly payments can fluctuate as the base rate changes.

Landlords With Bigger Portfolios More Likely To Choose Five-Year Fixed Rates

The survey found that landlords with larger portfolios are more likely to choose five-year fixed rates. For example, 71% of landlords operating within limited companies are choosing this option, as are 42% of landlords with portfolios of four to ten properties and 24% of landlords with portfolios of 20 properties or more.

What Does It All Mean?

Rob Stanton, Sales and Distribution Director at Landbay, says: “The topic of mortgage maturity is regularly discussed in the residential market, but we mustn’t forget the many landlords set to remortgage too. 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.”

He also points out that the decline in demand for tracker mortgages may suggest that some landlords are waiting for more favorable market conditions before remortgaging.

The Takeaway

The Landbay survey shows that landlords are still looking for certainty and stability in the current economic climate. Fixed rate mortgages offer this security, which is why they are the most popular choice for landlords looking to remortgage.