Buy-to-Let Mortgage Rates, Explained

Why we don't print a rate table here

Buy-to-let mortgage rates change with the Bank of England base rate, swap rates and each lender's own pricing — often several times a week across the market. A number printed on a guide page today is wrong by the time it's read next month, which is exactly the kind of stale-figure problem this site tries to avoid. What doesn't change nearly as often is the mechanism lenders price against: the interest cover ratio, the stress rate, and the portfolio rules — those are what this page covers.

The interest cover ratio (ICR)

A buy-to-let lender's core question isn't “can you afford this?” on your salary — it's “does the rent cover the mortgage interest by enough of a margin?” That margin is the interest cover ratio, commonly 125% for a basic-rate taxpayer or a limited-company borrower, and up to 145% for a higher-rate individual taxpayer. The gap between those two numbers exists because of Section 24: since mortgage interest stopped being deductible from an individual landlord's rental income, a higher-rate taxpayer keeps less of every pound of rent after tax than a company does, so lenders ask that rent cover a bigger multiple of the interest to compensate. Our Section 24 page works through why in full, with worked numbers.

The stress rate

ICR isn't calculated at the rate you'll actually pay — it's calculated at a higher, stressed rate, so the loan still clears the test if rates rise after completion. The figure most commonly published across the market is the higher of 5.5% or your product (pay) rate plus 2 percentage points; some five-year fixed deals are stressed closer to the pay rate itself, because the rate is locked for longer. Both the stress rate and the ICR are lender criteria, not a fixed rule set by the regulator — they vary by lender and by product, and a mortgage broker will know which lender's stress assumptions suit a specific deal best.

Product fees: often a percentage of the loan, not a flat number

Buy-to-let deals are frequently priced as a trade-off between the headline rate and an upfront product fee, and that fee is commonly quoted as a percentage of the loan rather than a flat amount — broker commentary through 2026 puts percentage-based buy-to-let arrangement fees most often in the 2–3% range, with some lower-rate deals charging more (5–7% has appeared on the most competitive headline rates) and flat-fee alternatives typically running from under £1,000 to around £4,000. We can't verify a precise, universal figure against a primary regulator or lender rate card — treat this as market commentary, and always compare the total cost over your likely holding period, not the headline rate, using the illustration your broker or lender is required to give you.

Limited company vs personal borrowing

The company-versus-personal decision changes the ICR you're tested at (125% typically for a company, versus up to 145% personally for a higher-rate taxpayer) as well as the tax treatment of the interest itself — a company deducts mortgage interest in full against its rental profit before Corporation Tax, while an individual gets only the 20% Section 24 credit. That can make a company mortgage support a bigger loan on the same rent, but it comes with company running costs, a different exit route (selling shares versus selling the property directly, each with its own tax consequences), and often a smaller panel of specialist lenders. Our limited company tax calculator compares the two on your own numbers, and the buy-to-let calculator's ICR toggle lets you see the borrowing side of the same comparison.

Portfolio landlord rules

Since the Prudential Regulation Authority's supervisory statement SS13/16 took effect, lenders apply specialist underwriting to any landlord classed as a “portfolio landlord” — the market's consistent reading of that PRA expectation puts the threshold at four or more mortgaged buy-to-let properties, counted in aggregate across every lender you borrow from, not just the one you're approaching. Cross that threshold and a new application isn't assessed on the single property alone: the lender wants the whole portfolio's rental cover, total borrowing (gearing), a property schedule and often a business plan or cash-flow projection. Some mainstream high-street lenders step back from portfolio landlords entirely, which is why brokers routinely move a growing landlord toward specialist buy-to-let lenders once the fourth mortgaged property is on the horizon. We couldn't confirm the “four or more” figure as a verbatim quote from the live SS13/16 supervisory-statement page itself (the detail sits in an underlying PDF) — it's presented here as the underwriting-market's consistent application of the PRA's expectation, not a directly-sourced sentence.

Run the numbers

Once you have a real rate from a lender or broker, put it through the buy-to-let mortgage calculator for the maximum loan and yield, or the stress test to check a specific loan amount against the ICR pass/fail. Check the stamp duty surcharge and the rental income tax the deal will actually leave you with before you commit.

Bank of England / PRA: SS13/16 Underwriting standards for buy-to-let mortgage contracts · our own Section 24 page for the finance-cost credit mechanics, read live 12 September 2026. No live rate, product-fee percentage or numeric PRA threshold on this page is a directly-quoted primary-source figure — each is flagged in the text as market convention or commentary where that's what it is.