Landlords have been given plenty of things to worry about in 2026, but when the year began mortgage rates weren’t one of them.
Conflict in the Middle East has pushed up mortgage costs across the board, but with buy-to-let rates being more expensive to begin with, the effects are even more stark.
Borrowing costs for investors who take an average two-year fix are now £1,100 higher compared to the start of March 2026, according to Moneyfacts. This is based on a £250,000 loan, with a 25-year term.
Further research shows overall buy-to-let product choice (both fixed and variable) has fallen sharply, by around 1,300 deals since the start of last month.
At the same time, landlords are also having to prepare for the introduction of the Renters’ Rights Act, which comes into force in May, while potentially facing costs of up to £10,000 to meet future EPC (energy performance certificate) requirements.
“The worst thing a landlord can do in the current market is nothing. Those who are prepared to adapt, refinance, reposition and manage their portfolio more actively are far more likely to come through the current pressures successfully,” said Marc von Grundherr, director of estate agency Benham and Reeves.
Telegraph Money explains your options to accommodate the rising cost of being a landlord.
Can you change your mortgage financing?
If you currently have a repayment mortgage, you might be able to reduce costs by moving to an interest-only deal, or extending the mortgage term – but both options come with trade-offs.
Nick Mendes, of mortgage broker John Charcol, said: “Such moves can ease pressure on cash-flow, but are more of a short-term release valve than a full solution. Many landlords are already on interest-only, and both this option – and extending the term – usually mean paying more over the life of the loan.”
That said, making changes to the funding can make a bigger difference in the case of portfolio landlords, as they often have more flexibility.
Mr Mendes added: “Rather than looking at each property in isolation, there may be scope to refinance across the portfolio more efficiently, raise equity from lower-geared assets, or even sell one weaker-performing property to support the rest.”
When thinking about financing solutions, the key is to be resourceful.
Howard Levy, buy-to-let specialist broker at SPF Private Clients, said: “Something else worth considering is seeing whether you can improve the property’s EPC. Some lenders offer a ‘green’ product range with preferential rates to landlords whose properties have good energy efficiency.”
