Rangewell

Failing to refinance could see portfolio landlords hit with a £23,000 hike to mortgage costs

By Rose Brown
Content writer
Published: 23 June 20251 minute read

The latest research by specialist property finance expert, Rangewell, has revealed that buy-to-let portfolio investors who fail to take the appropriate action when it comes to refinancing could see their monthly mortgage costs climb by over £23,000, rather than a £8,500 reduction due to improvements to the mortgage landscape. 

Table of Contents

Rangewell analysed the average amount owed through BTL mortgage borrowing by the average portfolio landlord and how much better off they are today when coming to the end of a two year fixed term as a result of improving mortgage rates, as well as the cost they could incur by failing to refinance and reverting to a standard variable rate. 

The research shows that, two years ago*, the average portfolio investor held 8.6 BTL properties financed across 5.8 loans to the tune of £503,680 in BTL mortgage borrowing owed. 

At the time, the average two year, fixed rate BTL mortgage product, at a 75% LTV, would have seen them offered an average mortgage rate of 4.78%. 

Based on the level of borrowing at £503,680, this would have equated to an interest only monthly mortgage repayment of £2,006 per month.

Fast forward to today and improvements to the mortgage landscape have seen the average rate for the same mortgage type fall to 3.93%. 

As a result, those coming to the end of a fixed-rate term today and taking a pro-active approach to refinancing could see the average monthly cost of their portfolio mortgage fall to £1,650 per month when making an interest only repayment. 

That’s a reduction of £357 per month, or £8,563 over the course of a renewed two year term.

However, failing to refinance and reverting to standard variable rate could be a costly mistake. Further analysis by Rangewell shows that, in doing so, the average portfolio landlord could see their mortgage rate jump to 7.09%.

This would push the monthly cost of their interest only mortgage repayment to £2,976, an increase of 970 per month, which over the course of a renewed two year term would equate to an increase of £23,270. 

Alasdair McPherson, Head of Partnerships at Rangewell, commented: 

“The mortgage market has moved decisively back in favour of portfolio landlords – but the gap between best-in-market rates and legacy rates that landlords can fall into through lack of research or professional funding support is now dangerously wide.

For portfolio investors, this isn’t just about individual savings – it’s about managing cash flow on a property by property basis, leveraging equity to grow the portfolio, and avoiding thousands in unnecessary cost.

Rangewell is also seeing strong refinance and re-leveraging opportunities in several specialist sectors:

Semi-commercial properties (e.g. flats above retail) - Lender appetite for mixed-use portfolios has increased substantially. This is one area where refinance terms are often improved beyond those available to pure residential portfolios, particularly where retail yields can offset any residential drag.

Holiday let portfolios - Yields in this sector have always been strong, but underwriting has historically been stricter. Now, a growing number of lenders are actively open to well-managed holiday let portfolios, meaning refinancing can not only cut costs but also unlock equity for further acquisitions.

Supported living and social care portfolios - These portfolios have historically proved problematic for many landlords, as most lenders didn’t understand the business model. There is now a much wider range of specialist lenders who actively understand and support supported living, making a huge difference in terms of refinance and expansion potential.

Foreign investors with UK property portfolios - Historically, overseas landlords have faced materially higher interest rates due to their lack of UK credit history. More lenders are now recognising this growing asset class, and are willing to offer competitive terms. That allows these landlords to reposition their portfolios more profitably with mainstream or specialist lenders.

HMOs (Houses in Multiple Occupation) - Lender appetite is especially strong in this sector, particularly for professional and student HMOs where rent-to-loan coverage is robust. With the right approach, landlords can access rates on par with standard BTL, delivering substantial savings and enhanced portfolio returns.

Multi-unit freehold blocks (MUFBs) - These remain a lender sweet spot, especially where five or more self-contained flats sit under one title. With the right rent roll and valuation evidence, we can often secure rates close to standard BTL terms, even at scale.”

Data Tables and Sources

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