Moneyfacts data reported by The Negotiator on 14 October 2026 put the average buy-to-let fix at 5.63% for two years and 6.01% for five years, both about 0.3 points above the reported early-September figures. The NRLA has reported mid-October lender cuts, but with a Bank Rate rise expected by most economists in Reuters' October poll, do not bank on meaningful falls before the new year.
This is the October follow-up to our September 2026 rates update, which explains why fixes are priced off swap rates rather than Bank Rate. Below: what moved since then, and the question many landlords are asking as payments rise, whether to stay on interest-only or switch to repayment.
What are buy-to-let mortgage rates in October 2026?
Moneyfacts data reported by The Negotiator on 14 October 2026 put the average two-year buy-to-let fix at 5.63% and the five-year at 6.01%. Compared with Moneyfacts figures reported by Property118 on 8 September, both are 0.31 percentage points higher:
| Reported Moneyfacts average | 8 September 2026 (Property118) | 14 October 2026 (The Negotiator) | Change (points) |
|---|---|---|---|
| Two-year fixed buy-to-let | 5.32% | 5.63% | +0.31 |
| Five-year fixed buy-to-let | 5.70% | 6.01% | +0.31 |
PropertyWire's report on 14 October gives the same October figures and a count of 5,192 buy-to-let products. We could not verify the October averages on Moneyfacts' own pages: the average-rate table on its buy-to-let page still shows 1 August 2026 when read on 18 October, so treat them as reported figures. Which? reported on 7 October that the average buy-to-let fix across all terms was 5.79% at the start of October.
The residential market tells the same story. Moneyfacts' average five-year fix hit 6% on 5 October, the first time in about three years, and the number of fixed deals below 5% (excluding Northern Ireland-only deals) fell from nearly 1,500 at the start of September to nine (Moneyfacts, 5 October 2026). By 15 October the averages had edged back to 5.96% (two-year) and 5.99% (five-year), reported by The Intermediary.
The reported Moneyfacts figures show the same gap between terms: five-year buy-to-let fixes cost 0.38 percentage points more than two-year fixes. Mortgage Introducer reported on 14 October 2026 that five-year swaps rose from 4.619% in mid-September to 4.723% on 13 October. Its explanation for the cuts was competition despite higher funding costs. Earlier, Moneyfacts reported on 5 October that swap volatility and an 18-year high in ten-year gilt yields had put pressure on lenders' pricing.
Which lenders changed buy-to-let rates in October?
Mostly cuts were reported by mid-October, after September's increases. These are moves reported by the NRLA, with rates stated as correct at 15 October 2026, rather than live product quotes (NRLA, 16 October 2026):
| Lender | Move reported by NRLA | Detail reported by NRLA |
|---|---|---|
| NatWest | Cut 0.43 points | Two-year purchase fix at 75% LTV at 4.16%, £3,999 fee |
| Accord | Cuts up to 0.43 points | Two-year fixes; up to 0.23 on five-year |
| Shawbrook | Cuts up to 0.25 points | Largest on bigger loans |
| Santander | Cuts up to 0.16 points | From 4.89%, £1,749 fee |
| Foundation | Cuts up to 0.10 points | New remortgage-only fixes |
| HSBC | Cuts | Selected two and five-year remortgages |
| Aldermore | Rises up to 0.17 points | Two-year from 4.11%, five-year from 5.21% |
Headline rates like these often come with large fees or tight criteria, which is part of why the averages sit well above them. Compare total cost over the fixed period in the buy-to-let mortgage calculator, not the headline rate.
Will the Bank of England raise rates on 5 November?
Most economists in Reuters' October poll expected it to. Bank Rate remains 3.75% after the Monetary Policy Committee's hold announced on 17 September, by six votes to three, with three members voting for 4% (Bank of England). In its poll taken 12 to 14 October, 54 of 63 economists forecast a rise to 4% on 5 November; Reuters also reported markets pricing four quarter-point rises by the end of 2027 (Reuters, 15 October 2026, syndicated by Global Banking & Finance Review). The poll found no majority for a second rise.
The next data point is inflation. CPI was 3.1% in the year to August, up from 2.9% (ONS, 16 September 2026). September's figure is not out yet: the ONS publishes it on 21 October. Our reading is that a higher-than-expected figure could reinforce expectations of a November rise; a lower one could trim the pricing of later rises, which helps shape longer fixed rates.
Then comes the Budget on 28 October. Check the published measures after the event. A change announced at Budget 2025 already has a date: from 6 April 2027, the government's published property income rates for England, Wales and Northern Ireland are 22%, 42% and 47%, with finance cost relief at 22% (HMRC technical note, 26 November 2025). Scotland and Wales have devolved tax powers, so check the applicable rates where you pay tax.
If your fix ends in the next six months, September's advice stands: secure a rate early, check a product transfer first, and weigh the five-year fix, whose stress test can affect how much you can borrow. Our remortgaging guide covers the process.
Interest only vs repayment buy to let: which costs less each month?
Interest-only, by a wide margin. On an illustrative £150,000 loan at 6.01%, using the five-year average in Moneyfacts data reported by The Negotiator on 14 October 2026, interest-only costs £751 a month and repayment over 25 years costs £967, a gap of £216.
The formulas:
- Interest-only: loan x rate ÷ 12 = £150,000 x 0.0601 ÷ 12 = £751.25
- Repayment: loan x r ÷ (1 - (1 + r)^-n), where r is the monthly rate (0.0601 ÷ 12 = 0.0050083) and n is the number of months (300) = £967.37
Against rent of £1,100 a month:
| Illustration: £150,000 at 6.01% | Interest-only | Repayment (25 years) |
|---|---|---|
| Monthly payment | £751.25 | £967.37 |
| Rent left after mortgage | £348.75 | £132.63 |
| Capital repaid in year 1 | £0 | £2,666 |
| Loan balance after 5 years | £150,000 | £134,917 |
| Loan balance at the end | £150,000 | £0 |
| Total interest over 25 years | £225,375 | £140,211 |
This holds 6.01% constant for the whole 25 years; actual rates may change when a fix ends. The £132.63 left on repayment must also cover letting fees, repairs, insurance and voids, leaving little margin. Run your own figures in the cash flow calculator.
Does a buy-to-let repayment mortgage change how much you can borrow?
Not necessarily: Barclays bases its rental cover test on stressed interest. Its criteria, checked on 18 October 2026, require the rent to cover "a stressed monthly mortgage interest payment" by 125% to 155% depending on your tax band (Barclays criteria). The capital part of the payment is not in that sum.
In our example, a lender testing a five-year fix at its assumed 6.01% pay rate with a 145% ICR needs rent of £150,000 x 1.45 x 0.0601 ÷ 12 = about £1,089 a month. £1,100 passes that illustrative rental test under either repayment method; other lender checks may apply. That interest-cover calculation does not test whether the rent covers the £967 repayment. You must.
Repayment can still change the term. Barclays allows up to 35 years on interest-only but 25 years on repayment or part-and-part, and the term must not run beyond any applicant's 80th birthday.
Is the capital part of a repayment mortgage tax deductible?
No. Only the interest element of a mortgage payment counts as a finance cost (gov.uk), and for individual landlords Section 24 restricts even that to a basic-rate tax credit (HMRC PIM2054). Capital repayments get no deduction and no credit, so you pay tax on the rent that goes to repaying the loan.
Year one of our example uses 2026/27 rates for a landlord holding personally in England, Wales or Northern Ireland, with £13,200 of rent and no other costs. It assumes all rent falls in the 40% band, the personal allowance is used elsewhere and the full 20% finance cost credit is available (HMRC rates):
| Year 1, higher-rate taxpayer | Interest-only | Repayment |
|---|---|---|
| Mortgage payments | £9,015 | £11,608 |
| of which interest | £9,015 | £8,942 |
| of which capital | £0 | £2,666 |
| Tax at 40% on £13,200 | £5,280 | £5,280 |
| Less 20% credit on interest | £1,803 | £1,788 |
| Tax due | £3,477 | £3,492 |
| Cash after mortgage and tax | £708 | -£1,900 |
The repayment landlord builds £2,666 of equity but has to find £1,900 from elsewhere to do it. A basic-rate landlord fares better (£3,348 left on interest-only, £740 on repayment) but the shape is the same. From April 2027, the 42% rate and 22% credit add about £85 to each tax bill.
Is it better to build equity or keep the cash flow?
It depends on what the spare cash would otherwise earn. With full 20% finance cost relief in 2026/27, interest at the illustrative 6.01% costs about 4.8% net. A savings account paying 4.41%, the average one-year non-ISA fixed rate in Moneyfacts' 14 October 2026 report (Moneyfacts), keeps about 2.6% if all interest is taxed at 40%, after any savings allowance. Paying down the debt wins that comparison before any early repayment charge.
Interest-only wins on flexibility. The £216 a month stays with you for voids, repairs or the next deposit, and you can still reduce the loan with overpayments. For example, The Mortgage Works' rules, checked on 18 October 2026, usually allow 10% a year on fixed deals without an early repayment charge; some products differ, so check your offer. Repayment forces the saving and suits landlords who want their portfolio mortgage-free by retirement.
What happens when an interest-only buy-to-let term ends?
In our example, with no capital repayments, you owe the full £150,000 in one lump. Barclays accepts sale of the property as a repayment strategy, or specified existing investments worth at least the interest-only balance, under its criteria checked on 18 October 2026. The usual exits:
- Sell. Allow for any capital gains tax and selling costs in the proceeds, and a forced sale in a weak market hurts.
- Remortgage. Only if the rent passes the lender's test at the rates of the day, and the term fits within their age limits.
- Pay it off. From savings, investments or overpayments built up over the term.
Plan the exit a decade out, not in the final year.
What is a part-and-part buy-to-let mortgage?
A loan split into an interest-only portion and a repayment portion. Split our £150,000 evenly and the monthly payment is £375.63 interest-only plus £483.68 repayment, £859.31 in total, leaving £240.69 of the £1,100 rent. After 25 years you owe £75,000 rather than £150,000. It halves the balloon for half the cash flow cost, and Barclays is one lender that offers it.
Should a landlord choose repayment or interest-only?
Choose interest-only if the property's cash flow is thin, you hold personally as a higher-rate taxpayer, or you plan to sell or refinance within the term. Choose repayment, or part-and-part, if the rent covers the full payment with a margin for costs and you want the debt gone by a fixed date. Whichever you pick, stress test the payment at a rate one point higher in the mortgage stress test before you commit.
General information, not legal, tax or financial advice. Rates and lender moves are as reported on the dates stated; speak to a whole-of-market broker and a tax adviser before you choose a product.
