How much deposit do I need for a buy-to-let mortgage?
Last updated on
Jun 22, 2026 22:09
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If you're thinking about buying a property to rent out, the deposit is one of the first numbers you need to plan around. A buy-to-let (BTL) mortgage deposit is the cash you put down up front, with the rest borrowed against the property.
This guide explains how much deposit you'll usually need, why buy-to-let deposits tend to be higher, what can push the figure up or down, and the other upfront costs worth planning for.
For the wider picture on rates, lender rules, and affordability, read more about buy-to-let mortgages.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.
Most buy-to-let mortgages need a deposit of around 25% of the price, although the figure can vary between 20% and 40% depending on the lender, the property, and your circumstances. Some specialist lenders may consider deposits as low as 15%, although the trade-offs are usually higher rates or stricter criteria.
You can also use our buy-to-let mortgage calculator to test your own numbers.
The deposit is higher because lenders see BTL as a different kind of risk. You're borrowing against an investment property, not the home you live in.
As a result, buy-to-let deposits are usually much larger than residential ones. While some residential mortgages start with deposits of 5% to 10%, buy-to-let lenders more commonly want 20% to 25% or more.
Rent isn't guaranteed. Tenants can move out, fall behind, or leave gaps between lets. Those empty stretches are called void periods, and they affect how safely the mortgage can be repaid.
The property is also not your main home, so lenders assume repayment priority may be different if money gets tight. Buy-to-let rates also tend to be higher than residential rates, and arrangement fees are often larger or charged as a percentage of the loan.
Rates have also risen compared with the ultra-low period before 2022, although they still move with the Bank of England base rate. That's one reason many lenders want a bigger buffer from day one.
For more context on the differences, read about the difference between a buy-to-let and a residential mortgage.
This is what those deposit levels could look like in cash terms:
These figures are illustrative examples only and are not guaranteed borrowing amounts. The amount you may be able to borrow depends on factors including your income, regular spending, credit history, deposit size, and lender affordability checks.
A smaller deposit usually means a higher LTV, which can lead to higher interest rates and lower monthly profit margins.
Lenders don't all apply one flat rule. The deposit you need can move up or down based on the property, the way you buy it, and how strong the case looks on paper.
Property type and condition can push the deposit higher because some homes are harder to sell, value, insure, or let. The more unusual the property, the more cautious many lenders become.
Many landlords buy through a limited company, often set up as a special purpose vehicle (SPV). This is a company created specifically to hold rental property.
Limited-company BTL mortgages often ask for 25% to 35% as a minimum, with some lenders preferring 30% or more. Underwriting is often stricter, too, and lenders usually want a personal guarantee from the directors.
That doesn't mean a limited company is automatically better. The tax treatment depends on your individual circumstances and current HM Revenue and Customs (HMRC) rules. Speak to a qualified tax adviser before deciding.
If you're considering that route, it helps to compare limited company buy-to-let mortgages.
Rental cover is one of the biggest moving parts. Lenders use the Interest Coverage Ratio (ICR) to test whether the rent comfortably covers the mortgage interest.
A typical stress test might be 125% for some borrowers or 145% for higher-rate taxpayers or limited company cases. Lenders apply different stress rates, and those can move with the Bank of England base rate. If the rent doesn't stretch far enough, the lender may want a bigger deposit.
Your credit profile matters too. A cleaner credit history often opens more options. Missed payments or heavier debts can narrow the lender pool and push deposit expectations up.
If you're a first-time landlord, some lenders may also want to see a minimum income of around £25,000, although the criteria vary significantly between lenders. Some are happy to lend to new landlords. Others apply stricter criteria, especially if you don't already own your own home.
Loan-to-value (LTV) is the percentage of the property's value you borrow, with the deposit covering the rest.
In general, a lower LTV means lower risk to the lender, which can improve the range of deals available, although rates still depend on your circumstances.
LTV can also improve over time if the property's value rises or the mortgage balance falls.
If you want a fuller breakdown, read loan-to-value (LTV) explained.
The deposit is only the headline number. The total cash needed to complete is usually higher once you add tax and fees. You'll usually need to budget for:
An illustrative breakdown for a £200,000 buy-to-let purchase with a 25% deposit:
These figures are illustrative examples only. Actual costs and borrowing amounts will vary depending on your circumstances and the lender.
Stamp duty rates and surcharges can change, so it’s a good idea to check the latest GOV.UK guidance before you complete.
Also budget for repairs, compliance work, and day-to-day running costs. For that side of the picture, see the real costs of being a landlord.
No-deposit buy-to-let borrowing is extremely rare, and most lenders won't consider it.
Using equity from your own home to fund the deposit is sometimes possible. That usually means remortgaging or borrowing more against your residential property, then using that cash for the buy-to-let purchase.
That route can work, but it means borrowing more against your home, which can increase your monthly repayments. It needs careful planning.
Other lower-cash routes can include:
For portfolio cases, lenders often want the overall LTV across the portfolio to stay around 60% to 75%, depending on the lender.
If you're exploring lower-deposit options, compare low deposit mortgages and check the rules around gifted deposits.
Lenders typically accept several deposit sources, as long as the money is traceable and documented properly. They include:
Borrowing against your home increases the amount secured on it and may increase your monthly repayments. You should consider the risks carefully and seek advice before proceeding.
If the deposit is gifted, lenders usually want a deed of gift or a signed gift letter, plus proof of identity and proof of where the money came from. The exact paperwork required can depend on the lender, so speak to a mortgage adviser or solicitor about the documentation.
Deposit sources lenders usually won't accept:
A Lifetime ISA can't be used for a buy-to-let purchase without triggering the government withdrawal charge.
This article is for general information only and isn't personal financial advice.
A few of the questions readers most often ask about buy-to-let deposits.
For most buy-to-let mortgages, the minimum deposit is around 20%, although 25% is the most widely available figure. A small number of specialist lenders may consider 15%, usually with higher interest rates and stricter rental cover requirements. The exact figure depends on the property and your circumstances.
Some buy-to-let lenders accept a gifted deposit from a close family member, although the rules are usually stricter than for a residential mortgage. The giver will normally need to sign a deed of gift and show the source of the funds. Not all lenders accept gifted deposits for buy-to-let.
Limited company buy-to-let mortgages often need a slightly larger deposit than individual landlord mortgages, usually around 25% to 35%. Lenders also often require a personal guarantee from each director and may apply stricter underwriting. The exact deposit still depends on the lender and the company structure.
BTL deposit requirements in Scotland are broadly similar to England, with most lenders asking for 20% to 25%. The bigger difference is the tax system. Scotland uses Land and Buildings Transaction Tax (LBTT) and the Additional Dwelling Supplement on extra properties. Wales uses Land Transaction Tax, while England and Northern Ireland use SDLT.
Usually not, as long as the purchase has not reached the point where contracts are exchanged. In most cases, buyers only become legally committed later in the process, once the mortgage offer is already in place. After contracts are exchanged, the deposit is usually at risk if the purchase falls through.
Plan your buy-to-let move with Habito
Options available to you will depend on lender criteria, affordability, and your personal circumstances. If you want to move quickly once your deposit is in place, you can get a mortgage in principle online.
You can use our buy-to-let mortgage calculator to test different deposit and borrowing scenarios, or speak to Habito’s online mortgage advisers about the options available to you.
Habito is authorised and regulated by the Financial Conduct Authority (FRN 714187).
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