Landbay asked brokers, “What’s your go-to mortgage recommendation for landlords right now?” – and the results show strong support for fixed deals.
A resounding 83% of brokers currently favour fixed-rate mortgages, while just 17% are recommending tracker products. Among those opting for fixed deals, 42% are pointing landlords to five-year fixes, while 38% prefer two-year options. Only 3% are suggesting 10-year fixes.
Rob Stanton, Landbay’s sales and Distribution director, commented:
“Brokers’ preference for 5-year fixed mortgages reflects their focus on providing landlords with stability in a volatile market. With 42% of brokers favouring 5-year fixed deals, these products are still outpacing 2-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.”
However, despite the ongoing popularity of 5-year fixes, brokers’ attitudes are beginning to shift. With interest rates expected to fall further over the next 12 months following the Bank of England’s fourth rate cut since August 2024, some brokers are starting to recommend shorter-term and tracker mortgages.
The number of households on fixed-rate deals still far outweighs those on tracker products; fewer than 600,000 households are currently on trackers, compared to over 7 million with fixed rates.
But Landbay’s data shows a clear change in sentiment. Just two years ago, 83% of landlords were considering 5- or 10-year fixed mortgages. Only 17% were looking at trackers or shorter-term fixes. Today, 55% of brokers now say trackers and 2-year fixes are their top recommendation.
Rob Stanton explains:
“There has been a shift in the BTL market’s preference for short-term deals and fixes. In the second quarter of 2022, 83% of BTL landlords told us they were looking at 5-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 2-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 per cent by the end of the year – they’re not wrong to be moving in this sort of direction.”
