Should I consider remortgaging buy-to-let properties now or wait if rates are predicted to remain stable into 2026?
Quick Answer
Deciding whether to remortgage BTL properties now or wait, even with stable Bank of England base rates at 4.75%, involves evaluating current mortgage end dates, potential exit fees, and stress test performance. Early action can prevent defaulting to a higher standard variable rate.
## Proactive Remortgaging Offers Financial Stability
Being proactive with remortgaging buy-to-let (BTL) properties, even when the Bank of England base rate (currently 4.75% as of December 2025) is predicted to remain stable, can secure favourable terms before potential market shifts. Locking into a new fixed rate now can provide budget certainty for the next 2 to 5 years, mitigating against unexpected rate rises down the line. Many lenders require applications several months in advance of a fixed rate expiring to ensure a smooth transition.
Securing a new deal often involves a new stress test. Standard BTL stress tests require 125% rental coverage at a 5.5% notional rate. If your current rental income covers this, remortgaging should be feasible. For instance, a property generating £1,000 in monthly rent would need to cover a mortgage payment of no more than £800 at the notional rate.
### What are the financial benefits of securing a new deal now?
Securing a new fixed rate now, potentially around 5.0-6.5% for a 2-year fix or 5.5-6.0% for a 5-year fix, allows for predictable outgoings, especially valuable given that Section 24 means mortgage interest is not deductible for individual landlords. This stability helps in accurate cash flow forecasting and budget management. A property with a £200,000 mortgage at 5.5% incurs an interest-only payment of £916.67 per month, which offers clear planning compared to variable rates.
## Potential Complications When Delaying a Remortgage
Delaying a remortgage can expose you to several financial risks, despite predictions of stable rates. The primary risk is defaulting onto your lender's Standard Variable Rate (SVR) once your current fixed or tracker deal expires which can be significantly higher than current fixed-rate offerings. SVRs are often several percentage points above the Bank of England base rate, making monthly payments unpredictable and often more expensive.
Another significant issue is that lending criteria can change without warning. Should interest rates rise slightly, even just to 5.0%, or if lenders tighten their stress tests, properties that qualified for finance today might no longer meet the criteria tomorrow. This is particularly relevant if rental yields are tight, making properties vulnerable to the 125% rental coverage at 5.5% notional rate stress test.
### When is waiting potentially justified?
Waiting might be justified if your current fixed-rate deal still has a substantial period left and early repayment charges would outweigh any potential savings from a new deal. Most fixed-rate mortgages have early repayment charges (ERCs) ranging from 1-5% of the outstanding loan amount. For example, on a £200,000 mortgage, a 2% ERC would cost £4,000, which typically negates the benefit of moving early unless rates are predicted to fall significantly, or your property is experiencing strong capital growth.
Consider a landlord whose 5-year fixed rate at 4.0% still has 3 years remaining. Their current interest-only payments are £666.67 per month. While current 5-year fixed rates are at 5.5-6.0%, moving would increase their payments to £916.67-£1,000 per month, plus face a substantial ERC. In this scenario, waiting for the current term to end would be more financially prudent unless they can secure a commercial mortgage.
## Investor Rule of Thumb
Always review your mortgage options 6-9 months before your current BTL deal expires, as this allows sufficient time to switch to a new product without defaulting to your lender's higher Standard Variable Rate.
## What This Means For You
Most landlords don't lose money because they remortgage, they lose money because they miss opportunities or get caught unprepared when a deal expires. Understanding the nuances of BTL mortgage stress tests and the impact of the Bank of England base rate is crucial for optimising your portfolio. If you want to know which remortgage strategy makes sense for your specific portfolio, this is exactly what we analyse inside Property Legacy Education.
Steven's Take
The prediction of stable interest rates into 2026, with the Bank of England base rate at 4.75% and BTL mortgage rates typically 5.0-6.5%, gives a window for strategic remortgaging. My approach has always been about certainty in costs. Fixed rates provide that. Don't be complacent because rates are stable now. Lenders' criteria can shift, and SVRs are rarely an attractive place to be. I'd typically recommend securing a new deal 3-4 months out from expiry, ensuring you pass the standard 125% rental coverage at 5.5% notional rate stress test. This isn't about chasing the absolute lowest rate; it's about controlling your liabilities and understanding your BTL investment returns. A good broker will find you the best product for what your property can support given the current climate.
What You Can Do Next
Check your current mortgage product's end date and any early repayment charges (ERCs) by reviewing your mortgage statement or consulting your lender. Confirm these details to avoid unexpected costs if moving early.
Contact an independent mortgage broker specializing in buy-to-let properties. They can assess your portfolio's eligibility for new products, considering the 125% rental coverage at 5.5% notional rate stress test and current BTL mortgage rates.
Obtain a detailed remortgage illustration from your broker, outlining potential new rates (e.g., 2-year fixed at 5.0-6.5% or 5-year fixed at 5.5-6.0%), product fees, and any valuation costs. This helps to compare the new deal against your current one.
Review your property's rental income against the required stress test criteria. Ensure your current rent covers 125% of the hypothetical mortgage payment at 5.5% to avoid issues with affordability checks for new loans.
Act on new mortgage offers well in advance of your current deal expiring (typically 3-4 months before). This ensures a seamless transition and prevents you from defaulting onto a higher standard variable rate (SVR), which can significantly increase your monthly outgoings without notice.
Get Expert Coaching
Ready to take action on financing & mortgages? Join Steven Potter's Property Freedom Framework for comprehensive, hands-on property investment coaching.