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Good news for landlords: borrowing costs for buy-to-let (BTL) mortgages have dipped to their lowest levels since 2022, providing some welcome relief after a difficult period for rental investors. The average 2-year fixed rate now stands at 4.88%, while 5-year deals are hovering around 5.21%, down from 5.35% and 5.33% a year ago, respectively…
This drop in rates is not only about cheaper finance. It also reflects a doubling in the number of available BTL mortgage products, now at 4,597, as lenders increase competition to attract landlords. This means more choice, better value, and an improved opportunity for landlords to secure favourable financing arrangements.
For Derby, the falling BTL borrowing costs could amplify some already encouraging local trends. Derby’s average house price hit £207,000 in June 2025, up 5.8% year-on-year, outpacing the East Midlands region’s growth of 4.4%. Meanwhile, average private rents in Derby reached £837 per month in July 2025, a jump of 10% compared to the same month in 2024.
Cheaper borrowing could make Derby even more attractive for buy-to-let investors, especially first-time landlords seeking affordable entry points. Lower financing costs have the potential to improve cash flow and yields in a city that already enjoys strong rental demand from young professionals and students. Analysts forecasting modest price growth also suggest Derby remains a relatively stable market for long-term landlords.
The drop in buy-to-let borrowing costs offers a welcome boost to landlords and could help energise Derby’s rental property market. With more products available, lower monthly repayments, and strong tenant demand, it is a positive development for both seasoned investors and those looking to step into the market for the first time.
✨ If you’re thinking of purchasing an investment property in Derby and would like some expert advice, get in touch with our professional, helpful and friendly lettings team today on 01332 294 396!!
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