If you’re planning to invest in a rental property, it’s important to understand how buy to let interest rates work. These rates affect how much you’ll pay each month and how much profit you’ll keep from your rental income.

The rates available depend on the type of deal you choose, fixed or variable, and the length of your mortgage term.

Different types of buy to let mortgages

There are a few different types of buy to let mortgage deals. The right one for you depends on how long you want to fix your rate for and whether you’re comfortable with changes in your monthly payments.

Fixed buy to let mortgages

These deals keep your interest rate the same for a set period, making it easier to plan your rental income and monthly costs.

2 year fix: Buy to let mortgage rates

A 2-year fixed deal gives you short-term stability. It’s ideal for landlords who want flexibility to switch deals soon or sell their property after a short period. If you’re still weighing up fixed vs variable mortgage options, checking the current buy to let interest rates can help you decide if a short-term fix like this offers the best value.

5 year fix: Buy to let mortgage rates

Many landlords prefer the stability of 5-year buy-to-let mortgage rates. This gives you a predictable monthly payment over a longer period, helping you plan your rental income with confidence.

10-year fix: Buy to let mortgage rates

A 10-year fix can make sense if you want to lock in a rate and avoid any changes for the long term. However, it’s less flexible and might include higher early repayment fees.

Variable rate buy to let mortgage rates

Variable and tracker mortgages may offer lower starting rates, but your payments can rise or fall during the term. This can suit landlords who are confident about handling possible rate changes or plan to sell or remortgage soon.

How are buy to let interest rates calculated?

Interest rates on buy to let mortgages are influenced by many things. Lenders look at the Bank of England base rate, your credit score, and the rental income expected from the property.

The higher your deposit, the better your chances of getting a lower rate. Lenders also check if the rent covers the mortgage payments with some buffer. This is called the interest coverage ratio.

To understand what you might need upfront, read our guide on how much deposit you need for a buy to let mortgage.

Example: How interest rates may vary

Scenario  Deposit Size  Rental Income vs Mortgage  Credit Score  Example Interest Rate 
Strong case  35%  Covers 145% of payments  Excellent  Lower rate (e.g. 4.5%) 
Moderate case  25%  Covers 130% of payments  Good  Medium rate (e.g. 5.2%) 
Higher risk (first-time buyer)  20%  Covers 125% of payments  Fair  Higher rate (e.g. 6.0%) 

Note: These figures are for illustration only. Lender criteria and market rates can vary.

How are they different from residential mortgage rates?

Many first-time landlords compare interest rates for buy to let with residential mortgage rates in the UK. But these aren’t the same.

Buy to let mortgages usually have higher rates. That’s because they carry more risk for lenders. Landlords might face empty periods between tenants or unexpected costs for repairs.

Also, buy to let mortgages are usually interest-only. That means you pay just the interest each month and repay the full amount later, unlike a residential mortgage, where you repay both interest and capital.

It’s useful to track both types when shopping around. Keeping an eye on current residential mortgage rates UK helps you see the full picture alongside buy to let options.

What factors influence buy to let interest rates?

Several things affect the interest rates of a buy to let mortgage. Understanding these factors can help you find a deal that suits your budget and long-term plans.

  • Loan-to-value (LTV): A lower LTV (for example, 60%) usually means a better rate. The more deposit you can put down, the more appealing you are to lenders.
  • Property type and location: Lenders may offer better rates for standard properties in popular rental areas.
  • Rental income: Your expected rent must cover a certain percentage above the mortgage payment—this is key for lenders when setting rates.
  • Credit profile: A strong credit history can help you secure a more competitive rate.
  • Market conditions: If the base rate changes or inflation rises, current buy to let interest rates will likely move too.

If you’re unsure about what affects your rate, take a look at the full list of requirements for a buy to let mortgage to get a better idea of what lenders look for.

How to compare buy to let interest rates?

When comparing buy to let mortgage deals, don’t focus only on the lowest advertised rate. A competitive offer often depends on several other factors that can affect the total cost of borrowing.

  • Initial rate vs overall cost

Some mortgages may offer an attractive low starting rate but come with high arrangement or product fees. Always look at the Annual Percentage Rate of Charge (APRC) to understand the full cost over the term.

  • Fixed vs variable

If your rental income is steady and you prefer predictable monthly payments, a fixed rate mortgage might offer more stability. A variable rate could be cheaper short term but may rise later.

  • Incentives

Look for extras like cashback, free valuation, or no legal fees, which can reduce your upfront expenses.

  • Flexibility

Check if overpayments, payment holidays, or early repayment options are allowed.

Doing a side-by-side comparison of total costs, features, and flexibility will give you a clearer picture of which deal suits your long-term goals. It’s also worth checking current interest rates on buy to let mortgages when reviewing offers.

Advice on getting a more competitive rate

Here are a few practical tips that could help you secure better interest rates for buy to let:

  • Increase your deposit: Even moving from 75% LTV to 70% can open up lower-rate deals.
  • Improve your credit score: Clear debts, pay bills on time, and avoid unnecessary borrowing before you apply.
  • Consider a longer fix: Sometimes, 5-year buy to let mortgage rates are lower than 2-year deals, and they offer more stability.
  • Speak to a specialist: A mortgage broker can help you find the right lender and deal based on your situation.

Remember, the right rate depends on your financial goals. Some landlords prefer flexibility, while others want certainty. Whatever your priority, keep checking current buy to let interest rates and review your options regularly.

Final thoughts

Buy to let interest rates are a key part of your rental investment journey. They influence your monthly payments, profit margins, and long-term returns. Whether you prefer a short fix, long-term stability, or flexible terms, knowing how rates work gives you better control over your choices.

If you’re comparing rates, always factor in your deposit, property type, and how long you plan to hold the mortgage. Looking at residential mortgage rates UK alongside buy to let options can also help you see how repayment structures and risks differ. Find a mortgage broker to discuss your options and get the best advice.