How much deposit on a Buy to Let mortgage?

Buy to Let mortgages are comparable to regular mortgages in many ways, (in terms of the processes involved), however, the deposit needed for a Buy to Let mortgage tends to be more competitive.

How much deposit do you need for a Buy to Let mortgage?

In years gone by, it had been possible to secure a Buy to Let mortgage with a deposit of just 15% but, nowadays, there are very few products available in this range. If you do source a deal with such a low deposit amount, you can expect that your repayment rates to be higher. The newer you are to Buy to Let, the more difficult it can be to secure a Buy to Let mortgage, unless you wield a hefty deposit. Anything above the 25% mark for a deposit will see much better rates and incentives being offered. To give you an idea about how much deposit you may need for certain valued properties, take a look at the table below.

The larger your deposit is the less money you will need to borrow, making you less of a risk to the lender. It also means that your rates will be lower. Despite that, don’t forget that there are still additional costs to consider such as your arrangement fees which can add weight to the overall costings.  

How to get a Buy to Let mortgage

Due to the fact that the Buy to Let mortgage market being extremely competitive, lenders are cautious and follow some strict criteria before approving a Buy to Let mortgage.

  • Typically, a 25% deposit on the purchase price is required, for an easier transition. Anything less and you may see rates or offers that are simply not sufficient.
  • If it’s a new build property you’re interested in, a Buy to Let deposit will need to be up and around the 35% marker because lenders view new properties or first-time buyers as a higher risk.
  • Most lenders will request proof that the market rate for rental income is at least 125% of the monthly mortgage repayments.

Most lenders will make an assessment of your personal situation too, before approving a Buy to Let mortgage.

  • A minimum age of 25+ is a strong requirement.
  • A minimum income of around £25,000+ is also expected.
  • A thorough financial assessment and credit check will also be carried out.

If you’re landlord looking to put together a property portfolio, there may be a set of different criteria to follow before approval.  

Why use a Buy to Let mortgage broker?

As an independent mortgage broker, MortgageKey are perfectly poised to help you find the right Buy to Let deal. Here’s why…

  • Award Winning Buy to Let mortgage deals
  • Years of Buy to Let experience and product knowledge
  • Friendly and impartial advice
  • Free, no obligation quotes
  • Comprehensive access to the entire market
  • Existing relationships with lenders

On top of the above, we are ready and awaiting your call Monday to Friday from 9am to 8pm. Speak to a courteous and helpful advisor and allow them to assist you in finding a suitable product for your individual requirements. Learn more about how Buy to Let mortgages work, how to make money from Buy to Let mortgages and consider these 12 things before making a decision!

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