Can You Get a Buy-to-Let Mortgage with 15% Deposit?

A common question among property investors is whether it is possible to obtain a buy-to-let mortgage with 15% deposit. Buy-to-let mortgages usually require larger deposits than residential mortgages because lenders view rental property as a higher risk investment. In many cases, landlords are expected to contribute at least 20–25% of the property value upfront. However, some lenders may offer higher loan-to-value options in certain circumstances.

The availability of a buy-to-let mortgage with a smaller deposit can depend on several factors. These may include the expected rental income from the property, the borrower’s overall financial position, their experience as a landlord, and the specific lending policies of different mortgage providers. Market conditions can also affect whether lenders are comfortable offering higher loan-to-value buy-to-let products.

This guide explains how lenders assess buy-to-let mortgages with smaller deposits, when a 15% deposit may be considered, and what affordability and rental yield requirements might apply. The aim is to provide a clear overview of typical lender criteria so that borrowers can better understand how buy-to-let mortgage applications are usually assessed.

Is a Buy-to-Let Mortgage with 15% Deposit Possible?

In some situations, lenders may offer a buy-to-let mortgage with 15% deposit, which equates to an 85% loan-to-value mortgage. However, these products are less common than those requiring deposits of 20–25%, and the eligibility criteria can be stricter.

Buy-to-let mortgages are typically assessed differently from residential mortgages. Instead of focusing primarily on personal income, lenders usually place greater emphasis on the rental income the property is expected to generate. Because higher loan-to-value lending carries greater risk, lenders may require stronger rental coverage ratios when deposits are smaller.

When lending at 85% loan-to-value, mortgage providers may also limit the types of properties that qualify. For example, unusual property types, properties above commercial premises, or certain flats may fall outside acceptable lending criteria. These restrictions help lenders manage the increased financial risk associated with smaller deposits.

Interest rates on higher loan-to-value buy-to-let mortgages can also be higher compared with products requiring larger deposits. This reflects the additional risk taken on by the lender. As a result, borrowers considering a 15% deposit often compare costs carefully to understand how mortgage rates and fees may affect the overall investment.

Why Most Buy-to-Let Mortgages Require Larger Deposits

Most buy-to-let mortgages require deposits of 20–25% because lenders typically view rental property borrowing as higher risk than owner-occupied lending.

One reason for larger deposit requirements is property market volatility. If property values fall, a higher borrower deposit provides a buffer that reduces the lender’s exposure. With buy-to-let investments, lenders also consider the possibility of rental void periods, where a property may temporarily have no tenants generating income.

Larger deposits can also improve the financial stability of the investment. Borrowers who contribute more upfront usually have lower monthly mortgage payments and a stronger equity position in the property. This can make the mortgage easier to sustain if rental income fluctuates or unexpected maintenance costs arise.

From a lender’s perspective, requiring a larger deposit also demonstrates commitment from the borrower. Investors who contribute more capital may be viewed as less likely to default on payments because they have a greater financial stake in the property.

How Lenders Assess Rental Income and Affordability

Even when a borrower provides a 15% deposit, lenders will normally assess whether the property’s expected rental income comfortably covers the mortgage payments.

Many lenders use a rental coverage ratio, sometimes called stress testing. This means the expected monthly rent must exceed the mortgage payment by a specific margin. For example, a lender might require rental income to be between 125% and 145% of the calculated mortgage payment, depending on the borrower’s tax status and the mortgage structure.

Stress testing may also involve assessing payments at a higher hypothetical interest rate than the actual mortgage rate. This ensures that the investment could remain affordable even if interest rates increase in the future. Higher loan-to-value borrowing, such as an 85% mortgage, may result in stricter stress testing rules.

Some lenders also consider the borrower’s personal financial position. Although rental income is usually the primary factor, lenders may check personal income, existing mortgages, and overall credit history to ensure the borrower could manage payments if rental income temporarily falls short.

Other Eligibility Criteria Lenders May Consider

In addition to deposit size, lenders usually assess several other criteria when deciding whether to offer a buy-to-let mortgage.

Credit history is often one of the first checks. Borrowers with strong credit records may find more mortgage options available, while recent missed payments, defaults, or other credit issues may reduce the number of lenders willing to offer higher loan-to-value borrowing.

Some lenders also consider whether the borrower already owns residential property. Certain buy-to-let lenders prefer applicants who are existing homeowners because they may view them as more experienced with property ownership and mortgage commitments.

Property type and location may also influence lending decisions. Standard houses and purpose-built flats are often considered lower risk compared with more specialised property types such as houses in multiple occupation (HMOs), holiday lets, or mixed-use buildings. These properties may require different mortgage products or larger deposits.

Example Scenario: How a Lender Might Assess a 15% Deposit Application

Consider a hypothetical example where a borrower wants to purchase a rental property worth £200,000 using a 15% deposit.

With a 15% deposit, the borrower contributes £30,000 and would require a mortgage of £170,000. A lender would usually start by estimating whether the expected rental income meets their stress testing requirements. If the lender requires rental income of 140% of the mortgage payment at a stressed interest rate, the property must generate sufficient monthly rent to satisfy that calculation.

Suppose the lender’s stress test indicates the mortgage payment would be assessed at £900 per month. In that case, the required rental income might need to be approximately £1,260 per month to meet the 140% threshold. If the estimated rent from local market comparisons meets or exceeds that level, the application may pass the rental income assessment.

The lender would then review other factors such as the borrower’s credit profile, existing financial commitments, and property suitability. Even if the rental income appears strong, the lender may still apply additional checks before determining whether the mortgage meets their lending criteria.

Risks and Considerations with Smaller Buy-to-Let Deposits

Using a smaller deposit can allow investors to purchase property sooner, but it may also introduce additional financial risks.

Higher loan-to-value mortgages typically come with higher interest rates. This means monthly payments could be larger than they would be with a bigger deposit. Over time, the total interest paid across the mortgage term may also be higher, which can affect the overall profitability of the investment.

Another consideration is equity. When a borrower contributes only 15% upfront, they hold less equity in the property initially. If property prices decline, the loan balance could approach or exceed the property’s value, which may make remortgaging or selling more complicated.

Rental property ownership also involves ongoing costs such as maintenance, letting agent fees, insurance, and potential vacancy periods. Investors typically factor these costs into their financial planning to ensure the property remains sustainable even if rental income temporarily drops.

Frequently Asked Questions

What is the minimum deposit for a buy-to-let mortgage in the UK?

Many buy-to-let mortgages require deposits of at least 20–25%. Some lenders may offer higher loan-to-value options such as 85% mortgages, but these are less common and often involve stricter affordability and rental income requirements.

Do all lenders offer buy-to-let mortgages with 15% deposit?

No. Mortgage criteria vary widely between lenders. Some may not offer 85% loan-to-value buy-to-let products at all, while others may restrict them to specific borrower profiles or property types.

Does rental income matter more than personal income?

For most buy-to-let mortgages, the expected rental income from the property is the main affordability factor. However, lenders may still review personal income and financial commitments to assess the borrower’s overall financial stability.

Can first-time landlords get an 85% buy-to-let mortgage?

Some lenders accept first-time landlords, but others prefer borrowers who already have experience owning property. Criteria vary, and first-time investors may find that larger deposits expand the range of available mortgage products.

Are interest rates higher with smaller buy-to-let deposits?

Higher loan-to-value mortgages generally come with higher interest rates because lenders take on more risk. As a result, mortgages with a 15% deposit may cost more than those with larger deposits.

This guide provides general information only. Personalised mortgage advice should always come from a regulated mortgage adviser authorised by the Financial Conduct Authority.