Buy-to-let mortgage deposits and loan-to-value

Most buy-to-let lenders cap borrowing at a set loan-to-value, so the minimum deposit is whatever is left of the price. A maximum of 75% loan-to-value, meaning a 25% deposit, is common, with some lenders going higher or lower, typical but varies by lender (lender criteria, accessed 20 Oct 2026).

A larger deposit moves the loan into a lower loan-to-value band. Lenders price each band separately, so the deposit affects both whether a mortgage is available and what it costs. The deposit also has to sit alongside the rent test, which can limit the loan even when the deposit would allow more.

Loan-to-value is the mortgage as a percentage of the property value or price, whichever is lower. A buy-to-let mortgage covering three quarters of the value has a loan-to-value of three quarters. Lenders publish their products in bands, and each step down in loan-to-value usually opens up more products and lower pricing.

Some lenders offer higher loan-to-value buy-to-let products for landlords with strong rent cover, while others ask for a larger deposit on flats above shops, new-build flats or unusual construction. How each band is priced is set out on the buy-to-let mortgage rates page, which looks at what moves the cost of each product rather than listing named deals.

The value a lender uses is its own valuation, not the asking price. If the valuer puts the property below the agreed price, the loan-to-value is worked out on the lower figure, so the deposit has to cover the shortfall or the price has to be renegotiated before the mortgage can go ahead.

Lenders test whether the expected rent covers the mortgage interest at a stressed rate. The PRA expects lenders to use a stress rate of at least 5.5% in most cases, with an interest cover ratio set by each lender (PRA Supervisory Statement SS13/16, accessed 20 Oct 2026). If the rent is too low, the loan falls.

Worked example (example figures, not market data): a £200,000 purchase with a 25% deposit needs a £150,000 loan. At a 5.5% stress rate and 125% interest cover, the lender would look for monthly rent of about £859. If the rent were £750, the loan would fall to about £130,909 and the deposit would need to rise to about £69,091.

Lenders differ on the stress rate and cover they use, especially for five-year fixed rates and for higher-rate taxpayers, so the same rent can support different loans with different lenders.

Lenders want to see where the deposit comes from and that it is not borrowed in a way that adds risk. Savings, equity released from another property, the proceeds of a sale and gifts from family are commonly accepted, subject to checks. Some lenders do not accept gifted deposits on buy-to-let, so the source matters as much as the amount.

Releasing equity from a home or another rental to fund a deposit is a common route for landlords who are building a portfolio. A buy-to-let remortgage can raise money from an existing rental, but it increases the borrowing on that property and has to pass that lender's own rent test.

The deposit is only part of the money needed to buy a rental. Stamp Duty Land Tax in England includes a 5 percentage point surcharge on additional homes (GOV.UK, Stamp Duty Land Tax: higher rates for additional properties, accessed 20 Oct 2026), plus legal, valuation and product fees and set-up costs.

Product fees can be paid upfront or added to the loan. Adding a fee to the loan increases the loan-to-value slightly and means interest is charged on the fee for the whole term, so a product with a lower rate and a large fee can work out dearer on a smaller loan than one with a slightly higher rate and no fee.

Lenders also expect landlords to keep a reserve for void periods and repairs. A buy-to-let mortgage calculator helps test how the deposit, rent and rate fit together before an offer is made, and a broker can check which lenders would accept the deposit source and the property type for a particular purchase.