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What deposit do I need for a buy-to-let mortgage?

Updated: Feb 12, 2021

Usually, you’ll need a minimum of 25% deposit on your buy-to-let mortgage. Any less and you end up with a limited choice of lenders and considerably higher fees.

That’s a lot higher than the 5–10% of a standard mortgage as lenders see buy-to-let mortgages as a greater risk than standard home loans. That’s because whether they get their money back doesn’t just depend on you, the borrower. It depends on a far less stable and predictable source: your tenants paying their rent.

Why a bigger deposit is better

15% is bare minimum. A low deposit won’t stop you getting a loan, but it will heavily restrict your choice of lenders and rates. If you’re buying to let for the first time, 15% may get you turned down completely.

If you can afford to, increase your deposit to 25%. That’s the magic threshold, where you’ll start to see your choices and rates improve dramatically.

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