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Buy to Let Mortgage Deposit

How much deposit do I need for a buy to let? Find out here.

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By Pete Mugleston   Mortgage Advisor

Last updated: 6th February 2019 *

How much do I need to save for a  buy to let deposit?

We have lots of people asking us about ‘buy to let’ mortgage deposits. How much you have to raise can very much depend on your circumstances and because all lenders are different, they each have a different criteria.

The good news is that the advisors we work with are experts when it comes to giving the right advice on buy to let deposits, even if you’ve been declined a mortgage or have a bad credit history.

In this article we’ll be looking at:

What percentage deposit do I need for a buy to let mortgage?

Most lenders would require a 25% deposit, although this can be higher if the property is a new build (often as much 35%), which some lenders deem to be a higher risk.

All lenders are different, so it can vary from 25% to 40% depending on your personal circumstances such as income and credit history.

What is the lowest deposit for buy to let I can get?

There are a few specialist lenders who will, if the circumstances are right, be prepared to offer a mortgage on a buy to let with as little as 10% deposit.

The good news is that the brokers we work with know who they are.

What can affect the deposit needed for buy to let?

This question is often asked when investors new to property purchasing are considering getting into the market. There are many variations that will dictate precisely what percentage of the overall value a lender will require.

These include:

  • Your credit history
  • Age at time of mortgage
  • Type of property
  • The Loan to Value (LTV) requirements
  • This will include appetite for risk, an individual’s personal financial history, agreed terms and conditions plus income of any named individual involved with the purchase. Other aspects can include age of the property, older properties might not be so popular due to maintenance and poor environmental records.

In addition there will be relevant matters that are case specific such as location of the property which might have an adverse risk such as flooding or subsidence. Such matters can affect the percentage of deposit required or whether a mortgage

How to get a deposit for buy to let mortgage?

In the first instance proof will be required of the overall viability of the proposal. This

The easiest resource for a buy to let amount of the mortgage required has to be personal savings. If these aren’t available then there are other options open to you including:

  • Remortgaging an existing home
  • Parent/family ‘gifting’ the deposit
  • Friends/relatives pooling their financial resources
  • Sale of other assets such as motor vehicles, jewellery, boats etc
  • Personal loans

Is purchasing a Buy to Let a good financial decision?

Who can raise a buy to let mortgage deposit?

Buying property to rent remains a popular way of investing in bricks and mortar there continues to be interest from all types of investors. These can be first time buyers – although lenders need you to own your own residential property before they will consider a buy to let mortgage, individuals looking to the future and wanting to create an income for later in life or even investors that have already purchased property and want to extend their portfolio. There are literally dozens of buy to let mortgage products on the market that can be tailored for an investor to consider.

Where to find advice about buy to let deposit amounts?

Whilst there is a lot of information to be found online it is s worth noting that the market is very fluid with products and rates constantly changing. So to keep up with the best buy to let rates contact the expert advisors we work with who can help source a  suitable provider for your circumstances.

Many people look initially for the headline low deposit buy to let mortgages as that smaller initial money down figure can look attractive. However this does need to be considered in the wider view, will there be higher arrangement fees? Is there a soft loan period followed by increased interest rates?  The way to find out is to talk to one of the advisors we work with.

What buy to let mortgage deposit is required by a limited company?

Since the rise in this type of mortgage (especially following the government tax changes), lending policy and required deposits for Ltd company buy to lets has grown to be more similar to those offered by standard buy to let lenders. As a result, although many require 25-30%, there are some that offer mortgages with as little as 15% deposit.

How does bad credit affect the deposit I need for a BTL?

With many mortgage providers, the higher the risk you are perceived, the higher the deposit required. It all depends on the severity of the incident and how long ago it was.

We have helped hundreds of borrowers who previously believed that they couldn’t get a mortgage because of bad credit. The main reason most people are declined a mortgage is due to poor advice.

The specialist advisors working with us are experts when it comes to helping people with bad credit. They have access to lenders and rates across the UK and have been able to arrange mortgages for people with the following circumstances:

  • Low credit score
  • Late payments
  • Mortgage arrears
  • Defaults
  • CCJs
  • Debt management plans
  • IVA
  • Bankruptcy
  • Repossession

Payday loans are something you must also avoid, because rather than enhance your credit score with lenders, they will be a liability with some lenders declining mortgages depending on how long ago the loan was taken out.

We believe that getting a mortgage should be as simple as possible. There are plenty of mortgage opportunities for bad credit borrowers, you just have to look in the right place and the advisors we work with know exactly where to look.

Speak to a Buy to Let deposit expert today.

If you have any questions and would like to speak to an expert advisor, Call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t change a fee and there’s no obligation or marks on your credit rating.

Updated: 6th February 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information.

The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA.

Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.