Experienced landlords with a history of successful rentals may be able to secure buy to let mortgages with just a 15% deposit!
It may be possible to borrow more, if you have other property with available equity to borrow against.
Get our expertise on 80-85% LTV buy to let mortgages.
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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.
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.
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 85% LTV (i.e. a minimum deposit of 15% of the property value)
Experienced landlords can borrow a maximum of 85% LTV (i.e. a minimum deposit of 15% of the property value)
Maximum applicant age. Lenders that offer a maximum loan to value of 80%, limit maximum applicant age to 84 years-old.
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 80% 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 80% 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 85% LTV.
Repayment basis can be interest only or capital repayment.
Highest LTV: Buy to let mortgages at 85% 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.
Landlord experience: Historically, 85% LTV deals were only accessible by landlord's with experience. However, now all landlords are able to access 85% LTV, subject to other lender criteria.
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 up to 85% LTV for 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: 85% 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.
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.
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