The Bank of England has not moved interest rates since December, yet lenders have been pushing up the cost of fixed-rate mortgages for weeks. For landlords with a deal ending in the next six months, and especially for those living overseas, the timing of your next move matters more than it has all year.
A second wave of rate rises in a single month
September 2026 was a busy month for anyone watching mortgage pricing. In the first fortnight, around 25 lenders raised their fixed rates in a single week. Then, in the middle of the month, five of the biggest names on the high street (NatWest, Santander, HSBC, Lloyds Bank and TSB) announced further increases within a few hours of one another, the second round of rises from each of them since the start of the month.
By mid-September, Moneyfacts was reporting average two-year and five-year residential fixes of around 5.7%, the highest in several months. Some sub-5% deals disappeared from shelves altogether.
Landlords were not spared. Several buy-to-let lenders, including HSBC, Coventry Building Society and The Mortgage Works, increased their rates or withdrew products in early September. The average two-year buy-to-let fix edged up from 5.29% to 5.32% in the first week of the month, according to Moneyfacts, with the average five-year buy-to-let fix sitting at around 5.7%.
Why fixed rates are rising while the Bank Rate stands still
It is a common question: if the Bank of England kept Bank Rate on hold at 3.75% on 17 September, why are mortgages getting more expensive?
The answer lies in swap rates. Swaps are the wholesale price lenders pay to lock in funding for a fixed term, typically two or five years. They move on where markets expect interest rates to go next, not on where they are today. Persistent inflation, driven partly by higher energy costs following the conflict in the Middle East, has led markets to price in rate rises rather than cuts. Swap rates climbed above 4.70% in September, and UK government borrowing costs reached levels not seen for many years.
The Bank of England’s own vote showed how finely balanced things are. Six members of the Monetary Policy Committee voted to hold rates, but three voted to raise them to 4%. The next decision is due on 5 November, and financial markets currently see a rise before the end of the year as more likely than not.
For borrowers, that means one thing: lenders are pricing in future rises now, and fixed rates are unlikely to fall significantly while that outlook remains.
A volatile year for buy-to-let
This is the second time in 2026 that landlords have been caught out by a sudden jump in borrowing costs. At the start of March, the average two-year buy-to-let fix was 4.66%. By 1 April it had climbed to 5.44%, with the five-year average reaching 5.75%, according to Moneyfacts. Hundreds of products were pulled from sale in a matter of weeks.
Rates eased a little over the summer, but September’s repricing has reversed much of that progress. At the same time, landlords in England have been adjusting to the Renters’ Rights Act, which took effect in May, adding to the cost and complexity of letting.
Why expat landlords feel rate rises more sharply
If you are a British expat with a UK rental property, rising rates can hit harder, for reasons that have nothing to do with how reliable you are as a borrower.
Fewer lenders, less competition. The expat buy-to-let market is served by a much smaller group of lenders than the mainstream market. When some of them reprice or pull products, there are fewer alternatives to fall back on. For expats living in the EU, choice has narrowed further this year, after new EU banking rules led several established expat lenders, including Skipton International, to stop accepting new applications from EU residents.
Tighter rental stress tests. Buy-to-let lenders check that your rent covers the mortgage payment at a stressed interest rate, usually with a margin of 125% to 145%. When rates rise, that test gets harder to pass, which can limit how much you can borrow, or force you to put in more equity at remortgage.
Consent to let costs. Many expats are still renting out their former home under a consent to let arrangement with their original lender. These often carry a higher rate or loading, and they offer no protection when rates move. If your consent is coming up for renewal, now is a good moment to look at a proper expat buy-to-let mortgage instead.
Time zones and paperwork. Expat applications usually take longer, with documents to certify and lenders to coordinate across different working weeks. In a market where products can be withdrawn with little notice, a slow start can mean missing the rate you wanted.
What to do if your fixed rate ends soon
Start early. Many lenders let you secure a new rate up to six months before your current deal ends. If rates continue to rise, an early lock-in protects you. If they fall before completion, your adviser can often look at switching to a cheaper deal, depending on the lender’s terms.
Look past the headline rate. In the buy-to-let market, the lowest rates often come with the biggest fees. In early September, one of the most competitive two-year buy-to-let deals on the market was priced at around 3.1%, but carried fees of more than £13,000. For a smaller loan, a slightly higher rate with a lower fee can work out much cheaper overall.
Consider the term of your fix. Five-year fixed rates are often stress-tested more favourably than two-year deals, which can help a property pass the rental calculation and give you certainty for longer. Whether that suits you depends on your plans for the property.
Check your rental income. If your rent has not been reviewed for a while, an up-to-date figure, supported by a letting agent, may help your application.
Do not just accept your lender’s switch offer. A product transfer is convenient, but it is worth comparing against the wider market, particularly for expats whose original lender may have changed its criteria since you last borrowed.
Get a clear view of your options
Smartr Finance works with British expats and UK landlords to find lenders that fit their circumstances, from consent to let refinancing to new purchases. Our new guide, A Guide to UK Mortgages for British Expats, explains the most common reasons expat applications are declined, how your country of residence affects your options, and how to prepare.
Contact us today to talk through your buy-to-let or expat mortgage.
Your property may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. Rates and figures quoted are market averages at the time of writing and may have changed.