BTL Remortgaging in 2026: How to Stress-Test Your Deal

Around 1.8 million fixed-rate mortgages expire in 2026. Roughly £49.7 billion of those are buy-to-let loans. Many of the landlords rolling off those deals are finding that the rate they are being quoted is not the only problem.

The other problem is the lender saying: "Your rental income no longer covers the affordability test."

A significant share of those maturing BTL deals were fixed in 2021 at rates between 2% and 3%, when the Bank of England base rate sat at 0.1%. Today, the average two-year BTL fixed rate stands at 5.46% and the average five-year fix at 5.77% (Moneyfacts, 9 April 2026). That gap, from where landlords were to where they need to be, is what is driving the problem. And the mechanism behind the "your rent doesn't cover it" message is something called the ICR stress test.

This article explains exactly how that test works, walks through the maths with clear examples, and covers what your options are if your property is failing it.

What is ICR and Why Does It Matter?

ICR stands for Interest Cover Ratio. It is the calculation lenders use to decide whether a buy-to-let property generates enough rental income to support the mortgage, even if interest rates rise after you take it out.

Critically, lenders do not test against the rate on the product they are offering you. They test against a minimum stress rate, sometimes called a floor rate. That floor rate is typically 5.5% across mainstream and specialist BTL lenders in 2026. The logic is straightforward. If you take out a five-year fix at 4.5% and rates spike in year three, can your rent still cover the payments? The stress test is designed to answer that before you borrow.

On top of the stress rate, lenders apply an ICR threshold. The amount your rent must exceed the stressed interest, expressed as a percentage. The standard requirements in 2026:

125% ICR for basic-rate taxpayers and limited company borrowers
145% ICR for higher-rate taxpayers owning property in personal name

Portfolio landlords, those with four or more mortgaged buy-to-let properties, face stress testing across their entire portfolio, not just the property being remortgaged. One underperforming property in the background can affect your ability to secure finance on a different asset. For more on that, see Portfolio Landlord Rules Explained.

These requirements originate from the Prudential Regulation Authority's Supervisory Statement SS13/16, reinforced by Policy Statement PS1/26 published in January 2026 and effective from January 2027.

Where Rates Are Now

As of 9 April 2026, Moneyfacts data shows:

Frequently Asked Questions

What is an ICR stress test on a buy-to-let mortgage?

The ICR (Interest Cover Ratio) stress test is the calculation lenders use to check whether your rental income is high enough to support the mortgage. They calculate the interest on your loan at a minimum stress rate (typically 5.5%), then require your rent to exceed that figure by a set margin. For basic-rate taxpayers, that margin is usually 125%. For higher-rate taxpayers in personal name, it is 145%.

What BTL mortgage rate do lenders use when stress-testing?

Lenders test against the higher of the actual product rate or their minimum floor rate. The standard floor rate in 2026 is 5.5%. Even if you are offered a product at 4.5%, your application is assessed as if the rate were 5.5%. This is why some landlords fail the stress test even when the headline rate looks affordable.

What can I do if my property fails the BTL stress test?

Options include reducing your loan-to-value by injecting capital, switching to a lender with a different floor rate or ICR threshold, using a lender that allows top-slicing to include your other income, or consulting a specialist broker with whole-of-market access. Sitting on SVR while waiting for rates to fall is expensive and rarely the best choice.

Do limited company BTL mortgages use the same stress test?

Limited company BTL applications typically face a 125% ICR threshold rather than the 145% sometimes applied to higher-rate taxpayers in personal name. Some lenders also allow top-slicing for company applications, meaning they can factor in the director's other income if the property rental income alone does not pass the test.