Request a CallBack
Buy to Let Mortgages - Deposit
If you were to approach a bank on a ‘commercial’ basis to buy rental property then they most certainly would be looking for a deposit from you of at least 30% (So if the property was valued at £100,000 then they would require you to fund £30,000 and would lend you £70,000) however at the time of writing, the majority of high street lenders are over-committed in this area and many are no longer willing to lend at all. The specialist buy to let mortgage market was born to make it easier for landlords to arrange funding and lenders would only ask for 20-25% deposit.
During the boom, the market moved on (perhaps too much with hind-sight) and it became commonplace for the required deposit to be only 15%. There were even lenders that were willing to accept only 11% deposit however the achievable rental yield tends to drive the amount of deposit required and in essence whether a property is a viable proposition or not to the investor.
The market appears to have come full circle and following the credit crunch, loan to values have been restricted and deposit requirements vary from lender to lender - Some want 35% deposit, the majority are comfortable at 25% deposit and there are a couple of lenders that will offer 20% deposit (with higher rates and subject to credit score). Realistically, the more deposit that you are able to put down on the proposed purchase then the better rates that will be available to you.
| Previous Page Intro. to Buy to Let Mortgages |
Next Page Buy to Let Mortgages - Rental Yield |
Check out our Blog for up to date product news and criteria enhancements as well as interesting mortgage related articles.