Low deposit buy to let mortgages

You cannot get a buy to let mortgage with no deposit, however, you may be able to raise a deposit in ways you haven’t considered. You could borrow against equity in another property. This can be done by remortgaging your property, to release any available equity in it, to use as a buy to let deposit. This is called remortgaging to ‘release capital’. Second charge buy to let mortgages are another way of raising a buy to let deposit from a property you own. A second charge BTL mortgage sits alongside any existing borrowing (e.g. a mortgage) on a property.

You will need a deposit of at least 15% of the property value. For example, if the property you are interest in is worth £180,000, you would need at least £27,000 to achieve a 15% deposit. Bear in mind that there are other costs when investing in buy to let. These include legal fees and mortgage product fees. Where you are not borrowing at the maximum loan to value threshold, some fees can be added to the loan amount with some lenders.

There is no reason why you shouldn’t invest in buy to let with a low deposit, but there are pros and cons to consider. Getting into property investment for the first time may mean you have no choice but to use a low deposit buy to let mortgage. Similarly, even if you are investing in a second, third, fourth or fifth property, you may only be in a position to raise a small buy to let mortgage deposit. Typically, the more you put down as a deposit, the lower the mortgage interest rates are. This is because the more you put down, the more risk you are taking on in the agreement with the lender.

Ultimately, as long as the mortgage is affordable for you, there is nothing to stop you investing in buy to let with a low deposit, nor is there anything wrong with doing so. If property prices fall and you have only put down a small deposit, you are at greater risk of falling into negative equity - where the property value falls below the amount you paid for it. But, taking out a buy to let mortgage with a low deposit can be beneficial, as it might allow you to invest in two or more properties, rather than just one. By doing that, you have multiple rental income streams, which could mean the total income you receive exceeds the amount you would have achieved from just one property.

Yes, you can currently get a mortgage with a 15% deposit, but you will have more mortgage interest rates to choose from if you put down a larger deposit.

Yes, you can get a buy to let mortgage with a 20% deposit. It is worth comparing mortgage interest rates at different deposit amounts, because you might find that 5% extra on your deposit at each deposit threshold makes a big difference to the mortgage interest rates available to you.

No, you cannot get a buy to let mortgage with 10% deposit, unless you have other property you can borrow against, to get at least 15% of the property value together. Remember, there are other costs associated with a buy to let mortgage than just the deposit, and also wider costs associated with managing a rental property. If you are struggling to raise funds for a deposit, it might be better to wait until you can save up a larger amount, or look at investing in a lower value property so that your deposit amount constitutes a larger percentage of the property value.

You can invest in rental property with as little as 15% deposit, or even no cash from your pocket at all, if you can raise a deposit by borrowing against other property you own. Many websites talk about needing a 25% deposit for a buy to let mortgage, because it is at this threshold where a larger number of lenders offer buy to let mortgage deals. 

The minimum amount of cash you have to put down on a buy to let mortgage is currently 15% of the value of the property you are buying. If you are struggling to raise a deposit, you might consider borrowing against equity in other property you own to raise the necessary funds.