BTL Mortgage Arrears Fall In Q1 2025

Eleven thousand buy-to-let (BTL) mortgages were in arrears during the first three months of the year, down six per cent from the previous quarter.

The proportion of landlord mortgages in arrears remains low, at 11,830 or 0.61 per cent of all BTL mortgages, while the comparison figure for homeowner mortgages is 1.03 per cent, equivalent to 90,140 loans.

During the quarter, the number of BTL mortgages in early arrears fell, which suggests that any rise in total arrears in the next quarter will be limited, says the latest report from UK Finance, the trade body for mortgage lenders.

Although possessions increased, they were low compared to historic norms. A total of 2,030 homeowner and BTL mortgaged properties were repossessed in Q1 2025. This is 85 per cent lower than the 13,200 in Q1 2009, which was the peak period of the financial crisis.

Possessions predominantly relate to older mortgages, with more than two-thirds relating to mortgages arranged at least a decade ago.

Mortgage rates shaved

Charles Roe, Director of Mortgages at UK Finance, said: "The number of mortgages in arrears fell slightly compared to the previous quarter, and the arrears numbers appear to now be on a downward trend. The recent cuts in interest rates and mortgage rates will also help households with their monthly bills."

Meanwhile, BTL mortgage lenders have shaved interest rates for fixed-rate mortgages.

The Mortgage Business (TMB), Nationwide Building Society's BTL brand, has a choice of two-year fixes with interest rates priced from 2.79 per cent to 5.84 per cent. Mortgages come with an arrangement fee ranging from £1,495 to £3,995 or 3 per cent of the value of the advance.

Mortgages are available for buying, remortgaging, or further advances.

Most TMW deals are offered at 75 per cent loan-to-value (LTV), although some cheaper rates are at a more modest 65 per cent LTV.

BTL loan best rates

According to mortgage monitor Moneyfacts, the best interest rate from a rival lender is a 5.99 per cent one-year fix at 75 per cent LTV from Molo.

The deal comes with a £150 booking fee and arrangement fees between 3.25 per cent at 75 per cent LTV and 4.25 per cent at 85 per cent LTV.

Molo also has a 7.54 per cent five-year fix at 75 per cent LTV.

Capital Home Loans (CHL) also features strongly in the best BTL mortgage rankings with two-year fixes at 65 and 70 per cent LTV, with interest rates clustered around the 2.6 per cent mark.

Booking fees are £150, while arrangement fees are a hefty 7 per cent of the advance.

Other landlord BTL mortgages with competitive rates are offered by Zephyr Homeloans, MT Finance, Birmingham Midshires Solutions, Keystone, Virgin Money, and Vida Homeloans.