Guide · 4 min read
Buy-to-let deposit: how much do you need?
Most lenders want at least a quarter of the price from you. But the deposit is only part of the cash you need, and the rent can push it higher.
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Key points
- Most buy-to-let lenders lend up to 75% of the price, so you need a deposit of at least 25%. A few go to 80% or 85%, at higher rates.
- The deposit isn't all the cash. Stamp duty and fees come on top: on our £180,000 example you need £57,599, not £45,000.
- The rent can make a lender cut the loan, which pushes the deposit up. On our example, a higher-rate taxpayer on a 2-year fix would need about £50,000, 28% of the price.
- A smaller deposit raises the return on your cash before tax, but leaves less each month and less room if rates rise.
How much deposit do you need for buy-to-let?
Usually at least 25% of the price, because most buy-to-let lenders lend up to 75%. On our £180,000 example that's £45,000. A few lenders go to 80% or 85%, at higher rates. But if the rent is low for the price, the lender's rent test can cut the loan and push the deposit up.
Lenders talk about loan to value (LTV): the loan as a share of the price. A 75% LTV mortgage means a 25% deposit. That's the most common size for a buy-to-let. The lowest rates are usually kept for loans of 60% or less, and lenders charge more as the loan grows.
The loan is a share of the price or the lender's valuation, whichever is lower. If their surveyor values the house below what you agreed to pay, the gap comes out of your pocket, or you go back to the seller.
All the cash you need
Our example is a £180,000 house let for £1,100 a month, bought by someone who already owns a home, with a 75% loan:
Stamp duty is often the biggest surprise. It's paid in cash when you complete and can't normally be added to the mortgage; Stamp duty on a buy-to-let explains the bill, and Wales has Land Transaction Tax instead. The arrangement fee can usually be added to the loan, but then you pay interest on it. Keep money back too for a survey, any work before the first tenant moves in, and a few months of costs in case it's empty.
A bigger or smaller deposit?
Here's the same deal with three deposits. All three use the same 5% rate so the comparison is fair; in practice a smaller loan usually gets a lower rate, which helps the bigger deposit a little.
| Figure | 40% deposit | 25% deposit | 20% deposit |
|---|---|---|---|
| Loan | £108,000 | £135,000 | £144,000 |
| Deposit | £72,000 | £45,000 | £36,000 |
| Cash you need, with stamp duty and fees | £84,599 | £57,599 | £48,599 |
| Cash left a month, after every cost | £423 | £310 | £273 |
| Return on cash, before tax | 6.0% | 6.5% | 6.7% |
| After tax, basic-rate taxpayer | 4.8% | 5.2% | 5.4% |
| After tax, higher-rate taxpayer | 2.3% | 1.5% | 1.1% |
| Rent ÷ interest at the 5.5% test rate | 2.22 | 1.77 | 1.66 |
Borrowing more stretches your cash further: before tax, the return on it goes from 6.0% with a 40% deposit to 6.7% with 20%. But the cash left each month falls from £423 to £273, and the rent's margin over the lender's test shrinks with it. A bigger loan is less forgiving when rates rise or the house is empty.
For a higher-rate taxpayer it turns round after tax: the return falls from 2.3% to 1.1% as the deposit gets smaller. Under Section 24 the extra interest only earns a 20% tax credit while the rent is taxed at the higher rate, so borrowing more costs more than it brings in.
When the rent sets the deposit
A lender will only lend what the rent can support at their test rate, whatever the loan to value. How much can I borrow for buy-to-let? explains the test.
Our example's rent supports the 75% loan on most tests, but not all. A higher-rate taxpayer on a fix of under 5 years is tested at 7% and needs the rent to cover the interest 1.45 times. That supports a loan of about £130,000, so the deposit rises to about £50,000: 28% of the price rather than 25%.
So work out the deposit from both limits, and use whichever is bigger: the price less 75%, and the price less the loan the rent supports.
Where the deposit can come from
- Savings. Lenders and solicitors must check where the money came from, so keep the bank statements that show it building up.
- Equity in your home or another rental. Remortgaging can release cash for a deposit, but it adds to what you owe, so check both sets of payments still work. Our remortgage equity calculator shows how much you could release.
- A gift from family. Some lenders accept one with a letter saying it doesn't have to be paid back; others don't. Ask before you count on it.
- Not a personal loan or credit card. Most lenders won't accept a borrowed deposit, and it would eat into the cash flow anyway.
Common questions
Can you get a buy-to-let mortgage with a 10% deposit?
Very rarely. Most buy-to-let lenders lend up to 75% of the price, and only a few go to 80% or 85%, at higher rates. So plan on putting in at least 15% to 20%, plus stamp duty and fees. A bigger loan also needs more rent to pass the lender's test, and leaves less each month after the mortgage.
Do you need a bigger deposit with a limited company?
Usually not. Most lenders to property companies also lend up to 75% of the price, so you still need at least 25%. A new company has no cash of its own, so the deposit normally goes in as a loan from you, which it can repay later with no tax. Company mortgages often cost a little more.
Can you use a Lifetime ISA for a buy-to-let deposit?
No. A Lifetime ISA can only go toward a first home you'll live in as your main home, and the rules say it can't be a buy-to-let. Before you're 60, taking the money out for anything else costs a withdrawal charge, which takes back the government bonus and some of your own savings too.
Do you get your deposit back when you sell?
Not as such. The deposit becomes your share of the house, so when you sell you get the price less the loan and selling costs. That may be more or less than the £45,000 you put in. Stamp duty and buying fees are spent for good, though they do lower your capital gains tax.
Figures from our calculator, on the rules in force today, checked against GOV.UK and the Welsh Revenue Authority on 8 October 2026. Not financial or tax advice: check your own case with an accountant.