Autumn Budget 2025: what it means for your mortgage and for buy to let landlords

The Autumn Budget 2025 arrived at the same time as the Bank of England confirmed that base rate will stay at 4 %.

That combination matters if you have a mortgage, and it matters even more if you are a landlord whose income depends on rent and borrowing costs.

The Budget did not rewrite mortgage rules overnight. It did, however, confirm a clear shift towards higher taxes on rental income and wealth. That will influence the shape of the housing market over the next few years, from the number of homes available to rent to the way lenders look at risk.

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If you are asking yourself

• “how does the Autumn Budget 2025 affect my mortgage?”

or

• “what is the real effect of the Budget on buy to let landlords?”

the rest of this article breaks that down in plain English.

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How does the Autumn Budget 2025 affect my mortgage?

The first point is the Bank of England decision. In November the Monetary Policy Committee kept base rate at 4 per cent. Four of the nine members actually voted for a cut, which is a sign that the next move is more likely to be down than up if inflation keeps easing.

For mortgage holders that means:

• If you are on a tracker or variable rate mortgage, your monthly payment stays tied to a 4 per cent base rate. There is no new jump in payments off the back of this Budget. If base rate is cut in 2026, your payment should fall in line with your product terms.
• If you are on a fixed rate mortgage, nothing changes immediately. The price of new fixed deals is driven by what markets expect base rate and inflation to do over the next few years. Those expectations are now for slower growth and gently falling inflation, which points to a slow drift down in fixed rates rather than a spike.

The Budget itself changes the wider picture around your income and running costs:

• Income tax thresholds are frozen until 2030 to 2031, so as pay rises more of your income can fall into higher bands. This will be referred to as a stealth tax.
• Taxes on savings, dividends and property income will rise by two percentage points from April 2027.
• A new council tax surcharge on very high value homes and other wealth taxes are aimed at the top end of the market rather than the average homeowner.

Put simply, the Autumn Budget 2025 affects your mortgage less through sudden rule changes and more through pressure on your overall disposable income., so it is important to keep your mortgage payments sustainable and to make sure your next deal fits the rest of your financial plan.

How does the Autumn Budget 2025 affect buy to let landlords?

The biggest single change for landlords is tax. From April 2027, the income tax rates that apply to property income will rise by two percentage points. That means 22 per cent for basic rate, 42 per cent for higher rate and 47 per cent for additional rate on rental profits.

On paper that looks like a small move. In practice it lands on top of a decade of policy changes including the restriction of mortgage interest relief, higher Stamp Duty on additional properties and tighter rules around tenancies and standards.

Industry analysis is blunt. The Financial Times and trade press describe the extra tax on rental income as a fresh blow, warning that it will shrink net yields and push some landlords to sell or restructure.  The Office for Budget Responsibility expects a gradual reduction in the supply of rental homes if these trends continue.

Other measures matter too:

• The visitor levy powers for mayors will mainly affect short stay and holiday lets, but they add another cost and admin layer for investors in that space.
• The new high value council tax surcharge on homes worth more than two million pounds will hit a slice of prime rental stock in London and the South East.
• Income tax threshold freezes and higher dividend tax will affect landlords who take income via limited companies as well as in their personal name.

The overall effect of the Budget on buy to let landlords is clear. Costs are rising, especially from 2027 onwards, while the regulatory bar stays high. That makes careful planning more important than ever.

Will the Autumn Budget 2025 change mortgage rates over the next few years?

Mortgage rates do not move simply because a Chancellor gives a speech or because one budget sets our a few changes. They move because markets change their view on inflation, growth and future Bank of England decisions. However, the indication is a future decrease in base rate.

Here is the current picture:

• Base rate is at 4 per cent and has been held there after a close vote.
• Inflation expectations for the next few years have fallen back towards target, which gives the Bank more room to cut when it is confident that price pressures are under control.
• Many mainstream mortgage products are already priced around the 4 per cent mark, and some forecasters expect rates to drift lower if the economy slows in line with the OBR outlook.

The Autumn Budget 2025 adds to this by raising the overall tax take and signalling slower growth later in the decade. That tends to reduce long term interest rate expectations rather than increase them, although there are no guarantees.

If you are trying to decide between a two year and a five year fixed rate deal after the Budget, the answer will depend on your plans, your risk appetite and how close you are to moving home. This is where personalised broker advice makes a real difference.

What does the Autumn Budget 2025 mean if I am remortgaging soon?

Money forums are full of people asking whether they should lock in a new fixed rate now or wait in the hope that rates fall. The Budget has not removed that dilemma, but it does give a bit more context.

Some practical points if your deal ends in the next six to twelve months:

• Start early. Lenders usually allow you to secure a new deal up to six months in advance. That gives you time to compare a product transfer with a full remortgage to a new lender.
• Use a broker to keep an eye on rate movements. If better deals appear before completion you may be able to switch, but every lender has its own rules and timelines.
• Think about your wider finances. With income tax thresholds frozen and other personal taxes rising later in the decade, it may be sensible to aim for a payment that you can live with comfortably, rather than chasing the absolute lowest possible rate today.
• Balance flexibility with price. Shorter fixes can give you more flexibility if you might move or change lender policy in a few years, but you carry more rate risk. Longer fixes give stability but reduce options if your circumstances change.

If you are unsure how the Budget affects your remortgage plans, a one to one conversation with a broker will usually be more useful than trawling through rate tables on your own.

What does the Autumn Budget 2025 mean for house prices and the housing market?

The Budget delivers some clear price signals, especially at the top end of the market, but most buyers will feel the effects more gradually.

On the demand side, house price forecasts for 2025 are modest. Many analysts now expect growth somewhere between one and four per cent, with stronger growth in later years if mortgage rates ease and wages continue to rise.

On the policy side:

• The high value council tax surcharge on homes worth more than two million pounds will mainly affect a small slice of prime property. It could slow activity at that level and encourage some high end owners to sit tight or adjust values.
• No major Stamp Duty reform means the usual transaction frictions remain for movers in the mainstream market.
• Planning system funding and longer term supply measures aim to increase the number of homes built, but those effects will take time to show up.

For most of our clients the bigger questions remain the same. Can you comfortably afford the mortgage payment on the property you want? How stable is your income? How long do you plan to stay there? The Budget changes the edges of the picture rather than the basic maths.

What should I do now if I am a landlord or homeowner who is worried?

Budgets always create noise. It can be tempting to react quickly. A more helpful approach is to treat this Autumn Budget as a prompt to review your plan.

If you are a landlord:

• Map out how the two point tax rise on property income will affect you from 2027 onwards.
• Stress test your portfolio for higher costs, a period of voids and realistic rent scenarios.
• Review whether your current ownership structure still makes sense. Personal and company borrowing each have pros and cons, and the right answer depends on your wider tax position.
• Think carefully before selling in a hurry. In many areas demand for good quality rental property is still very strong, and that could support rental growth over time.

If you are a homeowner:

• Check when your current mortgage deal ends.
• Speak to a broker around six to nine months before that date so you have time to explore options.
• Use this period of relative base rate stability to put a proper budget in place so you know what payment feels sustainable for you.

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Autumn Budget 2025 mortgage and landlord FAQs

How does the Autumn Budget 2025 affect mortgage holders?

The Budget does not change your existing mortgage contract at all. The main impact comes from the Bank of England holding base rate at 4 per cent and signalling that future moves are likely to be gentle, plus the long freeze in income tax thresholds. If you are on a tracker or variable rate your payment stays linked to that 4 per cent level. If you are on a fixed rate, the Budget influences what new deals cost through its effect on inflation expectations and long term interest rates rather than through direct policy changes.

How does the Autumn Budget 2025 affect buy to let landlords?

Landlords face a clear increase in tax on rental profits. From April 2027 the income tax rates that apply to property income rise by two percentage points, which reduces net yields for many investors.  This comes on top of earlier reforms such as reduced mortgage interest relief and higher Stamp Duty on additional properties. Some landlords may decide to sell, restructure into a company or push for higher rents to offset the extra cost.

What is the new mansion tax and will it affect me?

The Budget introduces a high value council tax surcharge on homes worth more than two million pounds in England from April 2028.  There are four bands, with annual charges starting at two thousand five hundred pounds and rising to seven thousand five hundred pounds for homes above five million. Fewer than one per cent of properties are expected to be caught. If your home or investment properties are below that value, the charge will not apply to you directly.

Will the Autumn Budget 2025 change mortgage rates?

Mortgage rates are driven by base rate, inflation and how markets view the outlook for the economy. The Budget raises taxes and points to slower growth later in the decade, which tends to pull long term interest rate expectations down rather than up, but there is still uncertainty. Most forecasts currently point to modest house price growth and a gradual easing in mortgage rates if inflation stays under control. There is no guarantee, so you should base any decision on your own tolerance for risk and your plans for the property.

Is now a good time to fix my mortgage after the Budget?

Whether now is a good time to fix depends on your circumstances. A fixed rate gives payment certainty, which can be valuable when taxes and living costs are rising and income tax thresholds are frozen.  A shorter fix may suit you if you expect rates to fall or you might move. A longer fix can provide peace of mind if you value stability. Speaking to an adviser who can model different scenarios against your budget is usually the safest way to decide.

Does the Autumn Budget 2025 make it harder to get a mortgage?

Lender affordability checks already build in margins for higher rates and bills. The Budget does not directly tighten those rules, but higher overall tax and cost of living pressures can reduce how much you can borrow because they affect your disposable income.  If you are worried about borrowing power, the most practical steps are to reduce unsecured debt where possible, keep your credit file in good order and speak to a broker who understands the detail of each lender’s criteria.

What should landlords do to prepare for the higher tax on rental income?

Landlords should start planning now for 2027. That includes reviewing how each property performs after tax, checking whether personal or company ownership is more suitable, and stress testing borrowing against realistic rent and cost assumptions. You should also speak to a qualified tax adviser, because the right strategy will depend on your wider income, future plans and any potential changes to capital gains and inheritance tax.

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Tax treatment depends on your individual circumstances and may change in future. The Mortgage Broker does not provide tax advice. You should obtain guidance from a qualified tax professional alongside any mortgage advice.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.