Buy To Let Mortgage Deposits

How much deposit do you need for a buy to let mortgage?

How much deposit do you need for a buy to let mortgage?

The amount you can borrow on a Buy to Let mortgage is based on the monthly rent.

Most buy to let lenders will require you to put down 25% as a minimum deposit. This is 25% of the property purchase price or valuation. Some lenders may require a deposit as large as 40%.

It is possible to get a buy to let mortgage with a deposit of just 15%. However, the interest rates are higher and there’s fewer lenders and mortgage deals to choose from.

With a 25% deposit you will have a decent choice of lenders and mortgage deals for your investment property.

For a buy to let remortgage this means you need equity of 25-40% of the property value.

So how much could you borrow?

The amount you can borrow with a buy to let mortgage is very different to a standard residential mortgage. While the lenders are interested in your own earnings, they are much more interested in the earnings (ie the rent) that your property can generate.

As with any other mortgage, your deposit will affect how much you can borrow, as this will affect the loan to value %.

If you want to borrow £150,000 against a buy to let property valued at £200,000, this equates to a LTV of 75%.

In addition to the LTV ratio, most lenders will also set a minimum ‘rental cover calculation’ which is generally set at 125% (or 145%) of the monthly mortgage interest payments.

So for a mortgage repayment of £1000 you will need to demonstrate rental income of at least £1250 per month.

Why use Drake?

CALL BACK REQUEST

Let us call you back.

Please enable JavaScript in your browser to complete this form.
I highly recommend this company! Kerry and her team were fantastically quick, courteous and efficient in securing us the best possible deal and very patient and polite when answering many enquires. Save yourself a headache and give them a call.

Liam Kirwan

Kerry has been an invaluable resource for us not once, but twice over the past five years, assisting us with both our initial mortgage and subsequent remortgage. Kerry's expertise and knowledge are truly commendable.

Ella Green

I wanted to express my sincere gratitude to you and the team at Drake for the exceptional service and attention to detail in helping secure mortgages for both of my children in the last three months. I have had numerous experiences with mortgage brokers, but none as good as you.

Duncan H

West Kingsdown
I wanted to express my sincere gratitude to you and the team at Drake for the exceptional service and attention to detail in helping secure mortgages for both of my children in the last three months. I have had numerous experiences with mortgage brokers, but none as good as you.

Duncan H

West Kingsdown