The deposit is one of the biggest hurdles for aspiring buy-to-let investors. Unlike residential mortgages, where deposits as low as 5% are available, buy-to-let lenders require significantly more upfront. In this guide, we explain exactly how much you need, how your deposit affects the rates you are offered, and how you might fund it.
For a broader overview of the buy-to-let market, read our complete guide to buy-to-let mortgages.
What Is the Minimum Deposit for a Buy-to-Let Mortgage?
The minimum deposit for a buy-to-let mortgage is typically 25% of the property’s purchase price. This means you need to fund a quarter of the property value from your own resources, with the lender providing the remaining 75% as a mortgage.
For example, if you are purchasing a buy-to-let property worth £200,000, you would need at least £50,000 as a deposit. On a £300,000 property, the minimum would be £75,000. These figures are before additional costs such as stamp duty, legal fees, and survey fees are taken into account.
A small number of specialist lenders offer buy-to-let mortgages with deposits as low as 15% to 20%, although these products are less widely available and typically come with higher interest rates and stricter lending criteria. Most borrowers will find the broadest range of competitive products at 25% deposit or above.
How Does Your Deposit Affect Your Mortgage Rate?
The relationship between deposit size and interest rate is straightforward: the larger your deposit, the lower your rate. This is because a bigger deposit means a lower loan-to-value (LTV) ratio, which reduces the lender’s risk.
Buy-to-let mortgage rates are typically tiered at key LTV thresholds. You will generally see the best rates available at 60% LTV (a 40% deposit), with competitive options also at 65% and 75% LTV. The difference between a 75% LTV rate and a 60% LTV rate can be significant — often 0.5% to 1% or more — which over the life of a mortgage can amount to thousands of pounds.
If you can stretch to a 30% or 35% deposit rather than the minimum 25%, you may find it opens up noticeably better deals. It is worth running the numbers with a broker to see whether the savings in monthly payments and total interest outweigh the opportunity cost of tying up more cash in the property.
| Deposit (LTV) | Rate range | Product availability |
|---|---|---|
| 25% (75% LTV) | Higher end of the range | Good — most lenders offer products |
| 30% (70% LTV) | Noticeably lower | Wider selection of competitive deals |
| 35% (65% LTV) | Competitive | Access to many best-buy products |
| 40%+ (60% LTV) | Lowest available rates | Broadest range of products |
For current rate information, see our guide to buy-to-let mortgage rates.
Where Can You Find Your Deposit?
Raising a 25% deposit is a substantial undertaking. Here are some of the most common ways buy-to-let investors fund their deposits:
- Personal savings — the most straightforward route. Lenders will want to see bank statements confirming the funds have been held for a period, typically at least three months.
- Equity from an existing property — if you own your home or another property, you may be able to remortgage to release equity to use as a deposit. This is one of the most popular strategies among experienced landlords expanding their portfolios.
- Gifted deposit — some lenders accept deposits that are gifted by a family member, though they will typically require a signed gift letter confirming that the money is a gift and not a loan that needs to be repaid.
- Sale of assets — proceeds from selling investments, shares, or other assets can be used. You will need to provide a paper trail showing the source of the funds.
Lenders are required to verify the source of your deposit as part of their anti-money laundering obligations. Whatever the source, be prepared to provide clear documentation showing where the money has come from.
Remortgaging to Release a Deposit
Remortgaging your existing home to release equity is a well-established strategy for funding a buy-to-let deposit. If your home has increased in value since you bought it, or you have paid down a significant portion of your mortgage, you may have substantial equity that can be unlocked.
For example, if your home is worth £350,000 and your outstanding mortgage is £200,000, you have £150,000 in equity. Remortgaging to 80% LTV would give you a new mortgage of £280,000, releasing £80,000 in cash that could be used as a deposit on a buy-to-let property.
On a £350,000 home with £200,000 outstanding, remortgaging to 80% LTV could release £80,000 — enough for a 25% deposit on a £320,000 buy-to-let property.
It is important to consider that remortgaging will increase the monthly payments on your home, and the buy-to-let lender will factor this into their affordability assessment. You should also check whether your current mortgage has early repayment charges before proceeding, as these can significantly affect the cost-effectiveness of this approach.
A broker can assess whether remortgaging makes financial sense for your situation and help you coordinate both the remortgage and the buy-to-let application. To get started, complete our short online enquiry.
- The minimum buy-to-let deposit is typically 25% of the property price — significantly higher than residential mortgages.
- A larger deposit (35-40%) unlocks substantially lower interest rates, potentially saving thousands over the mortgage term.
- Remortgaging an existing property to release equity is one of the most popular ways to fund a BTL deposit.
- Lenders must verify your deposit source for anti-money laundering purposes — keep clear documentation.
- Specialist lenders may accept deposits of 15-20%, but products are limited and rates are higher.