The best UK buy-to-let mortgages 2020


Updated on 23 January 2020 | 7 Comments

Whether you're looking to remortgage or buying a new investment property, we highlight some of the cheapest buy-to-let mortgage rates on the market today.

There’s no doubting the fact that it’s been a tricky couple of years for the nation’s buy-to-let brigade.

There have been all sorts of different regulatory and tax changes for landlords to get their heads around, from higher rates of Stamp Duty on additional purchases to a less enticing tax relief set-up.

There are more changes on the way this year too, such as extending the rules over how energy efficient a rental property has to be to all tenancies, rather than just new ones.

Nonetheless, there is still a substantial number of people that either can’t or don’t want to buy a home, providing landlords with a steady stream of tenants.

So if you’re looking at the buy-to-let market, what are some of the best mortgage deals around today?

Remember, we are just highlighting some of the most competitively-priced products on the market at the moment ‒ the best deal for you will vary based on your own circumstances.

If you’re in doubt about any mortgage deals, you should get some independent advice then compare deals in our mortgage comparison centre

Buy-to-let mortgages: should you use a broker or apply direct?

Individual vs limited company

Before we crack on, an important note to make is that all of the deals in this article are aimed at individual borrowers, rather than those investing in a property through a limited company, which has become much more attractive as a result of recent tax changes.

Lenders may have separate deals and criteria in place for lending to corporate buyers rather than individuals.

It’s really important that you do your homework on how buying through a business is different, and get some advice from a tax advisor first.

For more information, read our piece Limited company buy-to-let: is this switch a mistake for landlords?

Don't forget your landlord's insurance: get a quote from Axa now

Best two-year fixed-rate buy-to-let mortgages

If you want the peace of mind that comes from knowing exactly what your repayment will be each month, coupled with the ability to switch to a new deal in a couple of years without having to pay an early repayment charge, then a two-year fixed rate may suit you.

Here are the lowest rates on offer for this timescale currently:

Loan-to-value

Lender

Rate

Fee

65%

The Mortgage Works

1.19%

2%

75%

The Mortgage Works

1.44%

2%

80%

The Mortgage Works

2.49%

2%

85%

Kensington

4.59%

1.5%

 

Remember, you may end up better off going for a slightly higher rate, but with a smaller mortgage fee, depending on how much you’re borrowing and over what timescale.

For example, if you have a 20% deposit then rather than go with the lowest rate from The Mortgage Works, you could pay a slightly higher 2.95% in return for a completion fee of £950, which is likely to work out at less than 2% of the sum borrowed for many borrowers.

Here are five of the most competitive two-year deals with less significant fees:

Loan-to-value

Lender

Rate

Fee

60%

NatWest

1.35%

£995

75%

NatWest

1.74%

£995

80%

Ipswich

2.95%

£950

85%

Kensington

4.94%

No fees

Best five-year fixed-rate buy-to-let mortgages

If you want more security over the size of your repayments for a longer period, then a five-year deal may appeal.

Here are some of the lowest rates on the market today across a range of LTVs:

Loan-to-value

Lender

Rate

Fee

65%

The Mortgage Works

1.59%

2%

75%

The Mortgage Works

1.89%

2%

80%

Loughborough BS

3.09%

£1,499

85%

Kensington

5.29%

1.5%

And if you want to pay less upfront for your buy-to-let deal, these are some of the top deals with a less substantial fee:
 

Loan-to-value

Lender

Rate

Fee

60%

BM Solutions

1.81%

£995

75%

The Mortgage Works

2.14%

£995

80%

Ipswich BS

3.35%

£950

85%

Kensington

5.59%

No fees

Best 10-year fixed-rate buy-to-let mortgages

Some lenders allow landlords to take an even more long-term approach, fixing your rate for a whopping decade.

There are some downside to these deals. 

Not only are you paying a premium for certainty, it will be expensive to get out of the deal should you find a cheaper rate elsewhere or if your circumstances change and you need to move products.

Here are some of the 10-year deals currently on the market:

Loan-to-value

Lender

Rate

Fee

60%

Virgin Money

2.46%

£1,995

75%

Virgin Money

3.24%

£1.995

75%

Virgin Money

3.34%

£995

80%

Habito

4.09%

1.5%

80%

Habito

4.39%

No fee

Compare buy-to-let mortgage deals now

Going for a variable-rate mortgage

Of course, landlords are restricted to solely fixed rate deals. Plenty of landlords prefer the flexibility that comes from a variable rate, which may be tied to the bank base rate.

Inevitably, the big potential problem with a tracker is that the rate may end up being raised more quickly than you find comfortable.

Here are some of the lowest rates currently on offer on two-year variable buy-to-let deals:

Loan-to-value

Lender

Rate

Fee

60%

Barclays

1.49%

£1,795

65%

The Mortgage Works

1.54%

£1.995

75%

The Mortgage Works

1.59%

£1,995

75%

NatWest

1.95%

£995

There’s more to a good buy-to-let deal than the rate

While this piece has highlighted some of the more eye-catching rates on the market currently, when it comes to buy-to-let products, there is far more to think about than simply the rate and fee on offer.

You’ll also need to consider aspects like the lender’s criteria ‒ some are happier dealing with certain types of landlords than others ‒ as well as its service levels.

There is a lot of background work involved, which is why many buy-to-let landlords prefer to make use of a broker to handle their deals.

Don't forget your landlord's insurance: get a quote from Axa now

 

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