The average monthly cost of a buy-to-let mortgage has climbed up to 64% over the last decade.

Research by lettings agency Benham and Reeves analysed mortgage costs – assuming a 25% deposit and a 25-year mortgage term – shows that the average UK house price has increased from £191,298 a decade ago to £267,957 today, a rise of 40.1%.

As a result, the average buy-to-let landlord now requires a mortgage loan of £200,968 after placing a 25% deposit of £66,989, compared to a loan requirement of £143,474 a decade ago.

At the same time, the average buy-to-let mortgage rate has increased from 3.19% to 3.73%.

Combined, these factors have caused the average monthly cost of a full repayment buy-to-let mortgage to climb from £695 per month to £1,031, an increase of 48.4% or £336 per month.

However, the sharpest increase has been seen amongst landlords using interest-only mortgages.

Over the last decade, the average monthly cost of an interest-only buy-to-let mortgage has climbed from £381 per month to £625 per month, an increase of 63.8%.

That’s equivalent to an additional £243 every month.

Over the course of a standard two-year fixed mortgage term, this means landlords are now paying an estimated £5,839 more in mortgage costs compared to a decade ago.

Marc von Grundherr, Director of Benham and Reeves, comments: “While house prices have increased considerably over the last 10 years, higher borrowing costs have further intensified the financial burden facing landlords and this has been particularly notable for those utilising interest-only mortgages, which have traditionally formed a large part of the buy-to-let market.

“Many landlords have already absorbed significant increases in operational costs in recent years, from taxation changes and licensing requirements through to energy efficiency regulations and wider compliance obligations.”