Minimum Deposit for Buy-to-Let
NOTICE: Fiscal Events have led to mortgage lenders revoking High LTV Products. The Maximum is now 80% requiring a deposit or equity of 20% of the property value. This article will be updated in the coming weeks with up-to-date information.
Mortgages are available up to 85% Loan to Value (LTV) for Purchase or Remortgage. 85% LTV Buy to Let Mortgages are the highest LTV you can get as a property investor. That's just a deposit of 15% of the property value.
Landlords with larger deposits can enjoy rates up to 2% lower including lower fees, at 80% LTV compared to 85% LTV.
85% Buy to Let Mortgages in 2019 are popular in BTL Mortgage Comparison research allowing landlords use 'leveraging'. The High LTV Buy to Let Mortgage used to purchase more properties compared to a few with a Lower LTV.
The monthly rental amount can limit the maximum loan achievable and therefore requiring higher deposits. Our mortgage advisors can help you release equity from other properties to raise a deposit.
What is an 85% LTV Mortgage?
Loan to Value (LTV) is the mortgage amount percentage of the total value or purchase price. You can borrow up to 85% of the value of a Property.
As an example on a property worth £100,000. With an 85% LTV Mortgage you can borrow up to £85,000. That means just a deposit or equity of £15,000.
Mortgage Lenders consider 85% LTV as high risk giving us few options. The higher risk and fewer options are reflected in the mortgage rates and fees charged.
Whilst 85% LTV Mortgages are available. The maximum loan is still constrained by affordability, mainly the rent achievable.
What are the benefits of 85% LTV Mortgages?
Mortgages at 85 LTV are the highest property investors can obtain.
On purchases, you can buy a property with very little deposit.
On remortgages, you can raise capital from your property. Enabling you to use funds elsewhere such as a renovation or expanding your portfolio.
Can you borrow up to 85% LTV of the Property Value?
The affordability of a Buy-to-Let Mortgage is based on the rent that is achievable. It can be difficult for landlords to reach a rental stress test of 85% LTV.
Completing the mortgage on a Five Year Fix and/or Limited Company may open up more options. Our mortgage advisers will be able to guide you in this.
For illustrative purposes only. On a mortgage of £170,000 with the Kensington Product, you would require £974 rent and £1090 from KRBS.
85% LTV Mortgage Criteria
- Available for Houses in Multiple Occupation (HMOs)
- Available for Multi-Unit Blocks.
- Available for Limited Company Buy to Let.
- Available for Trading Companies.
- Available in England, Wales, Scotland and Northern Ireland.
- No Minimum Income.
- Interest Only or Repayment.
- Minimum 1 Year Landlord Experience Required
Can you get 85% LTV Mortgage in a limited company?
The products available are for Personal Name or in a Limited Company Buy-to-Let if purchasing in a Special Purpose Vehicle (SPV).