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    Buy To Let Remortgage UK 2026: Rates, ICR & Refinance Gap

    Remortgaging a UK buy-to-let in 2026 is harder than residential refinancing — the ICR stress test gets in the way. Landlords who took fixes in 2019–2021 at sub-3% rates now face the gap between current rents and current stressed BTL pricing. This guide explains how to navigate a BTL remortgage in 2026, when to product transfer vs fully remortgage, how to raise capital, and the workarounds when ICR doesn't pass.

    First Rung Now Editorial Updated 15 June 2026 7 min read

    The BTL remortgage timeline

    1. Month -6: Review portfolio, gather rental statements, check current property values.
    2. Month -5: Get rental valuation letter from letting agent (lender needs current market rent).
    3. Month -4: Apply for new product. Rate locked from offer.
    4. Month -2: Valuation, underwriting, offer.
    5. Month 0: Complete on the day existing fix ends — avoid even one month on SVR.

    The 2026 BTL rate landscape

    • 75% LTV 5-year fix (personal name): 5.30%–5.80%
    • 75% LTV 5-year fix (Limited Co SPV): 5.50%–6.30%
    • 75% LTV 2-year fix: 5.50%–6.00%
    • 75% LTV tracker (base + 1.0%): 5.00%
    • HMO/holiday let: add 0.40%–1.00%.

    The ICR refinance gap explained

    Worked example: £200,000 BTL, £150,000 mortgage taken in 2021 at 2.5%. Rent £900/month.

    • 2021 ICR test (5.5% stress, 145%): required rent = £150k × 5.5% ÷ 12 × 145% = £997. Just passed (or lender accepted a top-slice).
    • 2026 ICR test (7% stress, 145%): required rent = £150k × 7% ÷ 12 × 145% = £1,269. Current rent of £900 = £369 short.
    • Max loan supportable at £900 rent: £900 × 12 ÷ 7% ÷ 1.45 = £106,400.
    • Landlord must inject £43,600 capital, raise the rent, or move to a 5-year fix at lower stress (5.5%) where max loan rises to £135,400.

    Capital raising on BTL remortgage

    If your property has appreciated and rent supports a larger loan, you can release equity. Lender will want:

    • Purpose declaration (next BTL deposit, home improvements, business use).
    • Most BTL lenders cap capital-raise at 75% LTV; some specialists 80%.
    • Property valuation by lender's surveyor.
    • Latest mortgage statement on existing loan.

    Product transfer vs full remortgage

    • Product transfer: stay with current lender, new rate selected from their product range. No re-affordability, no valuation, no legal work. Fast (often 2 weeks). Best when criteria are tight.
    • Full remortgage: new lender, fresh application. Best when you want a sharper rate, capital raise, or a 5-year stress test instead of 2-year.

    Personal name to Ltd Co at remortgage

    Some landlords use remortgage timing to transfer property into an SPV. Tax consequences:

    • CGT triggered on the personal sale to the company at market value.
    • SDLT triggered on the company purchase (including 5% surcharge).
    • Incorporation Relief may defer CGT if you meet strict criteria (must be a 'business' for tax purposes).

    Get accountant advice before incorporating — the costs often outweigh the tax saving for small portfolios.

    Pros

    • Multiple specialist BTL lenders compete on remortgage business.
    • Capital raising opens portfolio growth opportunities.
    • 5-year fixes give lower stress rates and easier ICR passes.
    • Product transfers are fast and avoid re-affordability checks.
    • Limited company restructure can improve after-tax returns.

    Cons

    • ICR refinance gap is a real issue for many 2021-era landlords.
    • Rates 1.5%–2% above original 2019–2021 fixes.
    • Arrangement fees 1.5%–3% on BTL products.
    • Incorporation triggers CGT and SDLT — usually expensive.
    • Falling onto SVR even briefly costs hundreds in interest.

    Frequently asked questions