For many landlords, the biggest question isn’t “Can I increase the rent?”
It’s:
“How do I keep my rental property financially sustainable when my mortgage costs increase?”
Mortgage interest rates have changed significantly over recent years, putting pressure on landlords’ cash flow and overall returns.
The Bank of England has previously highlighted that buy-to-let landlords can be particularly exposed to higher interest rates because a large proportion of buy-to-let mortgages are interest-only.
So, when mortgage costs rise, what can landlords actually do?
There isn’t one answer.
Different landlords respond in different ways depending on their mortgage, property, rental income, tax position and long-term plans.
1. Some landlords increase the rent
One of the most obvious ways landlords may respond to higher mortgage costs is by reviewing the rent.
And this is something we have seen more of in recent years.
The English Private Landlord Survey 2024 found that 29% of landlords who increased the rent for their most recent new let said mortgage costs or lender requirements were one of the reasons. This was up from 11% in 2021.
But there is an important distinction:
A landlord’s mortgage cost does not automatically determine the market rent.
Rent still needs to reflect what tenants are willing and able to pay for a property in that particular area.
If a landlord increases the rent too far above the local market, they could face a longer void period — potentially cancelling out some of the benefit of the higher rent.
This is why landlords need to look at comparable local properties and current demand, rather than simply adding their increased mortgage cost to the rent.
2. Some landlords absorb the increase
Not every landlord passes higher mortgage costs directly onto their tenant.
Some choose to absorb some or all of the increase.
Why?
Because keeping a good tenant can have financial value too.
A landlord needs to consider the cost of:
- Finding a new tenant
- Advertising
- Referencing
- Cleaning
- Repairs
- Redecoration
- Possible void periods
- Professional management
- Time spent dealing with a new tenancy
Sometimes, a slightly lower rent with a reliable long-term tenant can make more financial sense than constantly trying to achieve the highest possible rent.
At My Landlord Cares, this is why we believe renting should be viewed as a relationship as well as a financial arrangement.
You can read more about our approach on our landlord property management page.
3. Landlords review their mortgage
Another option is to review the mortgage itself.
When a fixed-rate mortgage comes to an end, landlords may look at:
- Remortgaging
- Alternative lenders
- Different fixed-rate products
- The length of the mortgage term
- Interest-only versus repayment arrangements
- Whether additional borrowing is appropriate
The right choice depends entirely on the landlord’s circumstances.
It is also worth starting the conversation early.
The Government’s 2026 Mortgage Charter says participating lenders provide certain support options for eligible regulated residential mortgage borrowers, including the ability to lock in a deal up to six months before an existing fixed rate ends.
Important: the Mortgage Charter is primarily aimed at regulated residential mortgage borrowers, so landlords should check whether a particular mortgage and lender arrangement is covered rather than assuming the same protections apply to a buy-to-let mortgage.
4. They look closely at their costs
When mortgage interest rises, every other cost becomes more important.
Landlords may review:
Insurance → Maintenance → Management fees → Utilities during voids → Licensing → Compliance → Repairs
The objective isn’t necessarily to cut everything.
It is to understand where money is being spent and whether the property is being managed efficiently.
For example, a landlord might discover that small maintenance issues are becoming expensive because they are being left until they turn into larger problems.
Good property management can therefore become even more important when margins are under pressure.
Our property management services are designed around proactive management, communication and helping landlords manage the day-to-day responsibilities of renting out property.
5. They consider the tax position
Mortgage interest and tax can be a complicated area for individual residential landlords.
For individual landlords, mortgage finance costs are generally dealt with through the finance cost relief rules rather than simply being deducted from rental income in the same way as many ordinary property expenses.
HMRC’s current guidance explains the rules around residential property finance costs.
The Government has also announced separate property-income tax rates from April 2027, with finance cost relief provided at the property basic rate of 22%.
This is an area where landlords should get individual tax advice, particularly where they own multiple properties or operate through a company.
6. Some landlords change their investment strategy
When the numbers no longer work, some landlords reconsider their portfolio.
That might mean:
- Keeping the property
- Selling one property
- Reducing borrowing
- Buying a different type of property
- Investing in a different area
- Changing the way the property is managed
The English Private Landlord Survey 2024 found that mortgage payments were among the financial concerns reported by landlords, alongside issues such as repairs and rent arrears.
This doesn’t mean that every landlord is struggling.
But it does show why landlords need to regularly review the financial performance of their properties.
The biggest mistake: looking at mortgage costs in isolation
A property isn’t profitable simply because:
Rent > Mortgage
There are many other costs.
For example:
Rental income
− Mortgage interest
− Management fees
− Repairs
− Insurance
− Licensing
− Compliance
− Void periods
− Maintenance
− Tax
= Actual return
This is why landlords need to look at the whole picture.
A property that looked highly profitable several years ago may have a very different financial position today.
Should landlords increase rents when mortgage costs rise?
There isn’t a universal answer.
A landlord needs to consider both their own costs and the market.
If similar properties are renting for £1,000 per month, increasing the rent to £1,200 simply because the landlord’s mortgage has increased may not work.
The landlord could end up with a vacant property.
On the other hand, if the local market has moved to £1,100, failing to review the rent for years could also leave the landlord carrying unnecessary costs.
It’s about finding the balance between:
Fair rent + sustainable landlord costs + realistic market conditions.
Good tenants can be part of the solution
This is something we believe strongly at My Landlord Cares.
When mortgage costs rise, landlords understandably focus on their finances.
But the tenant is part of that financial equation too.
A good tenant who pays on time, looks after the property and wants to stay can provide stability.
And stability has value.
Reducing unnecessary voids, dealing with repairs quickly and communicating properly can help landlords protect their income while giving tenants a better renting experience.
Property management isn’t just about collecting rent.
It’s about protecting the relationship that makes the rental income possible.
So, how do landlords cope with mortgage interest increases?
There isn’t one magic solution.
Landlords may:
🏠 Review their rent against the local market
💷 Review mortgage options
📊 Analyse property profitability
🔧 Control unnecessary maintenance costs
🤝 Focus on good tenant relationships
📋 Improve property management and compliance
💰 Review their wider tax position
🏘️ Reassess their portfolio and long-term strategy
The important thing is to look at the whole picture rather than making a knee-jerk decision.
For some landlords, the answer may be a rent review.
For others, it may be better mortgage planning, improved management or simply accepting a lower short-term return while maintaining a strong tenancy.
And sometimes, the numbers may lead a landlord to reconsider whether a particular property still fits their investment strategy.
Final thoughts from My Landlord Cares
Landlords are facing a very different financial environment from the one many entered the market in.
Mortgage costs, regulation, maintenance, insurance and compliance all need to be considered alongside rental income.
But there is another side to the equation.
Landlording is a business — but renting is a human experience.
The most sustainable approach isn’t always about charging the maximum possible rent.
It’s about managing the property properly, understanding the market, controlling costs and building a tenancy that works for both sides.
At My Landlord Cares, that’s what we mean when we say:
Property management done properly.
Useful external links
For landlords wanting to understand the wider mortgage environment:
- Bank of England – Buy-to-let sector and financial stability
- GOV.UK – English Private Landlord Survey 2024
- GOV.UK – Mortgage Charter 2026
- GOV.UK – Mortgage finance costs and tax relief
Disclaimer
Disclaimer: This article is for general information purposes only and does not constitute legal, financial, mortgage or tax advice. Mortgage products, interest rates, taxation and landlord regulations can change, and the financial position of each landlord is different. Landlords should seek independent advice from a qualified mortgage adviser, accountant or other appropriate professional before making financial or property decisions.