Buy-to-let mortgage brokers are overwhelmingly recommending fixed rate mortgages to landlords, with five-year fixed products emerging as the top choice.
The research, undertaken by Landbay, asked brokers, “What’s your go-to mortgage recommendation for landlords right now?”.
83% of brokers were recommending fixed rate mortgages with only 17% recommending tracker products.
Roughly two in every five (42%) of respondents said five-year fixes, with more than a third (38%) opting for two-year fixes. A mere 3% of brokers picked 10-year fixes.
Earlier in May, the Bank of England cut interest rates for the fourth time since August 2024. Interest rates are widely expected to fall further over the coming 12 months, strengthening the case for recommending tracker mortgages.
Landbay’s polling data demonstrates a significant shift in tone over time, with short-term products and trackers being much more popular now, despite the continuing dominance of longer-term products.
Rob Stanton, sales and distribution director at Landbay, said: “Brokers’ preference for five-year fixed mortgages reflects their focus on providing landlords with stability in a volatile market. With 42% of brokers favouring five-year fixed deals, these products are still outpacing two-year fixes and tracker products. Landlords are navigating choppy regulatory waters and significant economic headwinds. It’s perfectly sensible to lock into certainty under the circumstances. It’s predictability over flexibility.
“There has been a shift in the buy-to-let market’s preference for short-term deals and fixes. In the second quarter of 2022, 83% of landlords told us they were looking at five-year or 10-year fixes. Only one in six – 17% – were interested in trackers or short-term fixes. Most of the industry was looking to shield against rate hikes.
“Compare that to today with 55% of brokers saying trackers and short-term two-year fixes are their go-to mortgage recommendation. In that context, it’s a completely different story. Brokers’ recommendations suggest a strategic shift away from surety and predictability, towards affordability and profitability. Given markets are currently forecasting a further three 0.25 percentage point cuts before Christmas – which would mean interest rates reaching 3.5% by the end of the year - they’re not wrong to be moving in this sort of direction.”
