Buy to let deposits and loan to value / LTV rates

Experienced landlords with a history of successful rentals may be able to secure buy to let mortgages with just a 20% deposit!

It may be possible to borrow more, if you have other property with available equity to borrow against.

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Information about 80% LTV buy to let mortgages

Can you get a buy to let mortgage with a deposit of less than 25%?

Landlords can get a buy to let mortgage with a deposit of less than 25%. Some landlords prefer to borrow at this loan to value ratio, because it provides a good balance between the mortgage deposit required, versus the number of competitive rates available.

Lenders who offer particularly low deposit buy to let mortgages, will have other criteria you will have to fit, this is because they set boundaries around lending to mitigate the additional risk involved with high buy to let LTV's.

About high LTV buy to let mortgages

Loan to value (LTV) describes the percentage of the total value of the property you want to borrow, versus the amount of your own funds you will invest. For example, a mortgage of £85,000 raised against a property value of £100,000 gives an LTV of 85%, and requires a deposit of £15,000.

Lenders consider LTV percentages when assessing your application for a mortgage. If the LTV is lower, it generally means less risk for the lender.

With a lower LTV, rates and fees are generally lower too, but raising a large deposit may put some low LTV products out of your reach.

If you can raise a larger deposit up-front, your mortgage will generally be cheaper in the long-term, because the risk of lending is lower, which commonly means you can access cheaper mortgage interest rates.

80% LTV buy to let mortgage eligibility

High loan to value borrowing can be achieved by a variety of applicant types and on a variety of property types, below is a summary of some scenarios. All of the following scenarios are subject to wider lender criteria, so to be clear on what you can achieve speak to our advisors:

First time buyers can borrow a maximum of 80% LTV (i.e. a minimum deposit of 20% of the property value)

Experienced landlords can borrow a maximum of 80% LTV (i.e. a minimum deposit of 20% of the property value)

Maximum applicant age. Lenders that offer a maximum loan to value of 85%, limit maximum applicant age to 79 years-old. There are lenders that offer a maximum loan to value of 80% with no upper age limit.

Applicant income no minimum income is required, documentation will be required to validate applicant’s income, identity and address.

Portfolio landlords: Can borrow up to 85% loan to value with no maximum limit on the number of mortgaged properties in their portfolio, with some lenders.

Multi unit blocks can achieve up to 85% LTV, including a multi-unit freehold property on one title.

HMOs can achieve a maximum borrowing of 80% LTV.

Limited company buy to let mortgages can be secured at up to 80% LTV.

Repayment basis can be interest only or capital repayment.

Key benefits of 80% LTV buy to let mortgages

Highest LTV: Buy to let mortgages at 80% LTV are the highest LTV you can go to as a landlord investor - this includes remortgages. 90% & 100% LTV mortgages for buy to let are not currently available.

85% loan to value deals had been available for a long time, to experienced landlords, however, during the Covid-19 pandemic they were initially withdrawn, then reintroduced by one lender, only to be withdrawn again (as of 12th October 2020). This is subject to change, so please contact us for up to date information. 

Landlord experience: Historically, 85% LTV deals were only accessible by landlord's with experience. However, now all landlords are currently capped at a maximum borrowing of 80% LTV, the highest loan to value buy to let mortgage is accessible to first time buyers with no other properties, home owners who are first time landlords and experienced landlords.

First time buyer affordability checks will look at personal income, where commonly other applications would focus on the rental income.

Interest only or capital repayment: Interest only mortgages are available at 80% LTV for buy to let

Tactics for landlords investing at 80% and high LTV buy to let

Invest in buy to let with a small lump sum: the most obvious solution for experienced landlords looking to buy their next property.

Raise capital from your existing portfolio: 80% is the maximum loan available from any buy to let lender, these products allow you to leverage the highest amount possible from your existing property portfolio.

Split a large amount of capital across multiple properties: leverage high loan to value borrowing to split a large amount of capital across multiple properties, rather than just one. There are risks to high-exposure borrowing, but the key benefit is that you can derive rental income from multiple properties rather than just one.

Important points to remember about a buy to let mortgage deposit:

  • 20% is currently the lowest deposit size we can access for a buy to let mortgage
  • When you have 40% deposit or more this normally means access to best available rates
  • Your buy to let deposit cannot come from an unsecured loan

Whilst the range of products available grows with the amount you can raise for your deposit, it is still possible to make a favourable investment in rental property with a low deposit.

Benefits of a low deposit mortgage

  • A low deposit mortgage is likely to be beneficial to you if your circumstances fall into the following categories:
  • Buying your first rental property and cannot raise a lot of capital
  • Expanding your portfolio and taking a small amount of equity from one property to invest in buying the next.
  • Spread risk across multiple properties by splitting capital into multiple low deposits.


Drawbacks of a low deposit mortgage

  • Higher interest rates
  • Fewer lenders to choose from
  • Potentially higher lender fees

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