How Much Deposit Do You Need for a Buy-to-Let Mortgage?
If you’re thinking about investing in a rental property, one of the first questions you’ll have is: how much deposit do I need for a buy-to-let mortgage?
The answer isn’t quite as simple as a single percentage — it depends on your credit profile, the property’s rental income, and even how the mortgage is structured.
At Mortgage Bridge, we help first-time and experienced landlords every day, and the deposit question always comes up first. So in this guide, we’ll break down exactly how buy-to-let deposits work, what affects the amount you’ll need, and how to make your money go further.
What’s the Minimum Deposit for a Buy-to-Let Mortgage?
Most buy-to-let lenders require a minimum deposit of 25% of the property’s value.
That means you’ll typically be able to borrow up to 75% loan-to-value (LTV). Some lenders go as low as 20%, while others prefer 30–40%, depending on your circumstances.
Here’s what that looks like in real numbers:
| Property Value | 25% Deposit | 30% Deposit | 40% Deposit |
|---|---|---|---|
| £200,000 | £50,000 | £60,000 | £80,000 |
| £300,000 | £75,000 | £90,000 | £120,000 |
| £400,000 | £100,000 | £120,000 | £160,000 |
In short: the higher your deposit, the better your interest rates and the wider your lender choice will be.
Why Are Buy-to-Let Deposits Higher Than Residential Ones?
Buy-to-let mortgages are considered slightly higher risk than standard residential ones because lenders know rental income can fluctuate — for example, during void periods or tenant changes.
To balance that risk, they require a larger deposit. A 25% deposit gives the lender a cushion in case property values drop or rental income dips temporarily.
The bigger your deposit, the lower the risk for the lender — and the better the deal you’ll likely get.
Can You Get a Buy-to-Let Mortgage with a 15% or 20% Deposit?
Yes, it’s possible — but it’s not common.
A small number of specialist lenders offer 80–85% loan-to-value buy-to-let mortgages (so you’d need a 15–20% deposit), but they’re usually available only if:
- You have an excellent credit record
- The rental yield is strong
- You already own at least one property
These products tend to have higher interest rates and stricter affordability criteria.
If you’re new to property investment, starting with a 25% deposit usually opens up more competitive rates and smoother approval.
What Factors Affect How Much Deposit You’ll Need?
While 25% is the standard benchmark, the actual amount you’ll need can change depending on your situation. Here are the main factors lenders look at:
1. Your Credit History
If you’ve had adverse credit, like missed payments or defaults, lenders may ask for a larger deposit — sometimes 30–40%. This helps offset their perceived risk.
We work with specialist lenders who accept imperfect credit, but being prepared with a bigger deposit gives you more flexibility.
2. Property Type
Some properties are seen as higher risk than others. For example:
- Flats above shops or restaurants might need a 30–35% deposit.
- HMOs (Houses in Multiple Occupation) often require 25–35%.
- New builds may need at least 30%.
Each lender has its own appetite for these property types, and we’ll match you with one that fits your goals.
3. Rental Income and Yield
Lenders use the rental coverage ratio (typically 125–145%) to calculate affordability. If the expected rent is low compared with the mortgage cost, you might need a bigger deposit to bring the figures into line.
4. Your Tax Bracket
Higher-rate taxpayers are often stress-tested more stringently by lenders. In some cases, they’ll need a bigger deposit to pass affordability.
5. Limited Company vs Personal Name
If you’re buying through a limited company (SPV), some lenders apply slightly different rules. While deposit levels are often similar (around 25%), limited company deals can sometimes allow higher borrowing because of lower tax stress rates.
How Do Lenders Calculate Affordability for Buy-to-Let Mortgages?
Unlike residential mortgages, where lenders focus on your salary, buy-to-let mortgages are mostly based on rental income.
They run what’s called a stress test, which checks that your rental income would comfortably cover the mortgage even if rates rise.
For example:
If your mortgage interest costs £800 per month, the lender might want your rent to be at least 125–145% of that — so £1,000–£1,160.
If your property doesn’t quite meet that test, you can:
- Increase your deposit (which lowers the loan size)
- Choose a five-year fixed rate (often tested more leniently)
- Use top-slicing, where your personal income supports the application
We’ll help you model these options so you know exactly how much you’ll need upfront.
Can I Use Equity from My Home as a Deposit for a Buy-to-Let?
Yes — this is one of the most common ways to fund a buy-to-let deposit.
If you’ve built up equity in your home, you can remortgage or take a further advance to release some of that value. The cash released can then be used as the deposit for your rental property.
This is called capital raising, and it’s a popular way to grow your portfolio without dipping into savings.
We’ll calculate how much equity you can safely release while keeping your existing mortgage affordable.
Can You Use a Gifted Deposit for a Buy-to-Let?
Usually, yes — but it depends on the lender.
Some lenders accept gifted deposits from close family members, provided they confirm it’s a genuine gift and not a loan.
If you’re using a gifted deposit, we’ll make sure you choose a lender that’s comfortable with that arrangement.
How Does Your Income Affect Your Deposit Requirements?
Even though buy-to-let mortgages are mainly rental-based, most lenders still have minimum income requirements, often around £25,000 a year.
If you fall below that, they may ask for a larger deposit to reduce their risk exposure.
Higher earners, on the other hand, may qualify for smaller deposits if their overall profile is strong — particularly if the lender allows top-slicing to boost affordability.
How Do Deposit Requirements Change for Portfolio Landlords?
If you already own several rental properties, lenders will look at your entire portfolio when deciding how much you can borrow.
Portfolio landlords (usually four or more properties) may face slightly higher deposit requirements — typically around 30%.
Lenders want to see that your portfolio is performing well overall and that each property’s rent covers its mortgage comfortably.
We handle these complex cases all the time and know which lenders are best for multi-property investors.
How Can a Bigger Deposit Help You Save Money Long-Term?
While it’s tempting to go for the lowest deposit possible, putting down more upfront often pays off in the long run.
Here’s how a bigger deposit helps:
- Lower interest rates: Lenders reserve their best deals for lower LTVs.
- Higher borrowing power: It can help you pass stricter stress tests.
- More choice: You’ll have access to a wider range of lenders.
- Faster equity growth: You own more of the property from day one.
Even an extra 5% can make a big difference to your monthly payments and long-term returns.
How Can You Raise a Bigger Deposit?
If you’re still building your buy-to-let deposit, here are some ways to reach your target faster:
- Remortgage your home to release equity (if you have one).
- Save regularly through a high-interest savings account or ISA.
- Partner with another investor to pool resources.
- Sell existing assets or investments.
- Look at cheaper properties in higher-yield areas to start smaller.
We can help you map out a clear savings or equity-release strategy to get there sooner.
Are Deposit Requirements Different for Limited Company Buy-to-Lets?
Generally, no — most limited company mortgages also require around a 25% deposit.
However, the underwriting process differs slightly. Lenders focus on the company directors’ credit profiles and the rental income, rather than personal affordability.
The main appeal of using a limited company is tax efficiency, especially for higher-rate taxpayers, since mortgage interest remains fully deductible as a business expense.
If you’re planning to build a portfolio, a limited company structure can offer more flexibility and scalability — we’ll help you decide if it’s right for you.
Can You Get a Buy-to-Let Mortgage with No Deposit?
Realistically, no — lenders won’t offer 100% buy-to-let mortgages.
However, you may be able to get creative:
- Use equity from another property as your “deposit.”
- Joint venture with another investor who provides the funds.
- Bridge-to-let financing if you’re buying below market value and adding value through refurbishment.
We’ll walk you through all possible routes based on your financial position and risk appetite.
How Mortgage Bridge Can Help You Secure the Right Buy-to-Let Deal
At Mortgage Bridge, we specialise in helping landlords — whether you’re buying your first rental property or expanding your portfolio.
We’ll:
✅ Work out exactly how much deposit you’ll need for your target property.
✅ Compare lenders and rates based on your credit, income, and goals.
✅ Explain all your options clearly, from remortgaging to limited company setups.
✅ Handle the full application process, keeping everything smooth and stress-free.
Our role is to make buy-to-let financing simple, transparent, and tailored to you.
Final Thoughts: Plan Your Deposit, Plan Your Success
Your deposit is the foundation of your buy-to-let journey — it shapes your borrowing options, rates, and long-term returns.
While 25% is the standard minimum, your exact deposit depends on your property type, income, credit, and rental yield. The good news? There’s almost always a way to make it work.
At Mortgage Bridge, we’ll help you find that balance — maximising what you can borrow without over-stretching yourself.
If you’re ready to explore your buy-to-let options or calculate how much deposit you’ll need, let’s chat. We’ll help you take the next confident step towards becoming (or growing as) a landlord.