New Sub-3% Mortgage Product Signals Boost for UK Property Investors

Published by Magnate Assets on May 9, 2025

In a noteworthy development for UK property investors, MT Finance has cut its buy-to-let mortgage rates, falling below 3% for the first time recently. This is great news for both UK and overseas investors, offering more affordable borrowing options to boost profits in the rental market, where demand is high.

Rates Now Below 3%

The new rate from MT Finance starts at 2.99% for a Tier 1 two-year fixed buy-to-let product, previously at 3.19%. The Tier 2 rate is now a competitive 3.65%, with reductions up to 0.24% across all products. These mortgages include ICR stress testing at 125%, aligning well with borrowing criteria for affordability.

Why This Is Important for Investors

With interest rates above 3% for months, this offer provides an opportunity for property investors to increase their profits. It's especially helpful for those using interest-only mortgages, a strategy favoured by many seasoned landlords because:

Lower Monthly Costs: By only paying the interest, investors reduce monthly expenses and keep more rental income.
Better Cash Flow: More available cash allows investors to reinvest, diversify their portfolio, or save for future property purchases.
Higher Returns: Lower borrowing costs mean higher returns on your initial investment.
Exit Flexibility: At the end of the fixed term, investors can choose to pay off the loan or refinance, depending on the market conditions.

Appeal for Overseas & Expat Investors

The UK property market attracts overseas and expatriate investors because buy-to-let mortgages are available to them. Lenders, including MT Finance, offer special terms for non-UK residents looking to invest in UK real estate. Whether in the Middle East, Asia, or Europe, getting a UK mortgage lowers barriers to investing and makes it more efficient.

Boost Your ROI: An Example

Consider buying a property worth £450,000 with a 25% deposit (£112,500) and financing the rest with a 2.99% interest-only mortgage. Here's what that looks like: -

Yearly mortgage interest: ~£10,088
Net rental income: 6% Rental Yield - £27,000 per annum
Total ROI over 5 years: Over 115%

When considering rental income and property value increase, a lower interest rate directly increases profits and savings over several years.

Maximise ROI with Strategic Financing

At Magnate Assets, we connect with lenders specialising in buy-to-let financing for UK-based and international investors. Whether you're new to overseas purchasing or looking to grow your UK portfolio, our advisors can assist with: