Most buy-to-let mortgages stop at 75% loan to value, so the short answer is a deposit of at least 25%. The longer answer is more useful, because on a lot of buy-to-let purchases the deposit is not what limits your borrowing at all. The rent is.
This guide explains what LTV means on a buy-to-let mortgage, how much deposit and cash you actually need, and why two landlords with identical deposits can be offered very different loans on very similar properties.
What does LTV mean on a buy-to-let mortgage?
Loan to value, or LTV, is the size of your mortgage expressed as a percentage of the property’s value. Divide the loan by the value and multiply by 100.
Buy a property for £300,000 with a £225,000 mortgage and the LTV is 75%. The remaining £75,000 is your deposit. Borrow £240,000 on the same property and the LTV is 80%, with a £60,000 deposit.
The lower the LTV, the more of your own money is in the property and the less risk the lender is carrying. That is why pricing improves as LTV falls, and why the product choice available to you widens at the same time.
One thing that catches people out: LTV is calculated against the lender’s valuation, not the price you agreed with the seller. More on that below.
What is the maximum LTV on a buy-to-let mortgage?
75% is the practical ceiling for most of the market. A smaller group of lenders will go to 80%, and a handful of specialists offer 85%, though those products come and go and are priced accordingly.
So the honest position is:
- 75% LTV (25% deposit) – where the widest lender choice and the sharpest pricing sit.
- 80% LTV (20% deposit) – available from fewer lenders, with tighter criteria and higher rates.
- 85% LTV (15% deposit) – a small specialist corner of the market. Real, but restrictive, and expensive.
The property matters too. Flats above commercial premises, houses in multiple occupation, new-build flats and non-standard construction all tend to attract lower maximum LTVs than a standard house, whatever your deposit looks like.
How much deposit do you actually need?
The deposit is the number landlords budget for. It is rarely the number that completes the purchase.
On a £250,000 buy-to-let bought in England at 75% LTV, the deposit is £62,500. On top of that you should expect:
- Stamp duty. Additional property purchases carry a 5 percentage point surcharge on top of standard rates, which on £250,000 comes to £15,000. Scotland and Wales operate their own systems with different rates and thresholds.
- Legal fees and searches.
- A lender arrangement fee, which on specialist buy-to-let products is often a percentage of the loan rather than a flat sum. It can usually be added to the mortgage, but adding it increases your borrowing.
- Valuation and broker fees, where these apply.
- A working reserve for void periods, repairs and the gap before the first rent arrives.
On that example the total cash required is closer to £80,000 than £62,500. Our stamp duty calculator will give you the tax figure for a specific purchase price.
Why rent, not deposit, usually decides how much you can borrow
This is the part the LTV headline hides. A buy-to-let lender does not simply lend 75% of the value because you have a 25% deposit. It works out how much the rent will support, and lends the lower of the two figures.
The test is the interest coverage ratio, or ICR. It compares the expected monthly rent against the monthly mortgage interest, calculated not at the rate you will pay but at a higher stressed rate.
The rule: PRA supervisory statement SS13/16. The Bank of England’s Prudential Regulation Authority sets the minimum underwriting standards for buy-to-let. It records 125% as the industry standard minimum ICR, and allows lenders to assume all borrowers are higher-rate taxpayers, which is why 145% is so common in practice. On the stress test, lenders must allow for a rate increase of at least 2 percentage points and must assume a minimum borrower interest rate of 5.5%, unless the rate is fixed or capped for five years or more.
Two consequences follow from that, and both matter more than your deposit.
The first is that a five-year fix can allow a larger loan than a two-year fix on the same property, because the five-year product falls outside the stress test requirement and the lender can assess the rent against a lower rate.
The second is that at higher LTVs the rent has to work considerably harder, which is often why an 80% or 85% product turns out to be unavailable in practice even when the deposit is there.
How much rent does each LTV need?
An illustration on a £250,000 property, using a 5.5% stress rate. These are worked examples of the mechanics, not a quotation — every lender sets its own ICR and stress assumptions.
| Loan | Rent needed at 125% ICR | Rent needed at 145% ICR |
|---|---|---|
| 75% LTV — £187,500 | £1,074 a month | £1,246 a month |
| 80% LTV — £200,000 | £1,146 a month | £1,329 a month |
“Landlords come to us focused on the deposit, and it is the wrong place to start. I have seen plenty of people with their 25% ready who still could not borrow what they had planned, because the rent would not stretch at the lender’s stress rate. Work out what the property will actually support first, then decide what deposit makes sense around it. Doing it in that order is often the difference between an offer that completes and one that falls over three weeks in.”
Hiten Ganatra, Managing Director, Visionary Finance
Moving from 75% to 80% adds £12,500 of borrowing but requires roughly £83 a month more rent from the same property. If the property will not achieve it, the deposit is irrelevant — the loan is capped by the rent.
Our buy-to-let calculator will give you an indication of what a property might support.
Is a lower LTV always better?
Not automatically, and this is a genuine judgement rather than a rule.
Borrowing at a lower LTV gives you better pricing, more lenders to choose from, lower monthly interest and a rental calculation that passes more easily. For a landlord buying one property to hold for the long term, that is usually the stronger position.
But capital tied up in one property is capital not available for the next. An investor building a portfolio may reasonably prefer three purchases at 75% to two at 60%, provided the borrowing is comfortably affordable and the wider plan stands up. Higher leverage also means more exposure if values fall or rates rise at the wrong moment.
There is no single correct LTV. There is only the one that fits what you are trying to do.
What happens if the property is down-valued?
Your LTV is calculated against the lender’s valuation, not your agreed purchase price. If you agree £300,000 and the valuer returns £280,000, a 75% mortgage becomes £210,000 rather than £225,000 – and you have to find the £20,000 difference in cash, renegotiate, or walk away.
It is worth knowing that most term lenders will lend against the lower of price and valuation for roughly the first six months of ownership. That is lender policy rather than regulation, and some apply it for twelve months, but it is the reason a property bought below market value cannot usually be refinanced at its true value straight away.
Does LTV work differently through a limited company?
Maximum LTVs for a special purpose vehicle are broadly similar to personal-name lending, with 75% again the practical ceiling across most of the market. The rental calculation is where the difference shows up.
Because a company can deduct mortgage interest as a business expense, it is not affected by the restriction on finance cost relief that applies to individual landlords, often referred to as Section 24. Lenders commonly reflect that by applying a 125% ICR to company applications rather than the 145% used for a higher-rate taxpayer buying in their own name.
In practice that can mean the same property supports a larger loan through a company than in a personal name. It does not follow that incorporating is the right answer — that depends on tax, and it is a question for an accountant rather than a broker.
What about portfolio landlords?
If you have four or more distinct mortgaged buy-to-let properties, the PRA expects lenders to treat you as a portfolio landlord and underwrite you through a specialist process. That definition sits in the same supervisory statement, SS13/16, and it counts properties held in your own name and through companies, together and separately, in aggregate.
It means the lender assesses more than the property in front of it. Expect questions about the whole portfolio: total borrowing, aggregate LTV, historical and expected cash flows, your assets and liabilities, your experience and your business plan. Some lenders cap the aggregate LTV across the portfolio, and some limit total exposure. Criteria vary widely, which is why advice tends to be worth more to portfolio landlords than to anyone else.
Can you remortgage to a different LTV?
Yes, and your LTV usually improves over time without you doing anything. As the property gains value — or the balance reduces, if you are on a repayment mortgage — you can drop into a lower LTV band and a better set of products when you remortgage.
You can also go the other way and raise borrowing against an existing property to fund the deposit on the next one, provided the rent supports the larger loan and the lender is comfortable with the purpose.
A rule worth knowing before you remortgage. SS13/16 does not apply the full affordability expectations to a buy-to-let remortgage where there is no additional borrowing beyond the amount currently outstanding. Arrangement, professional and administration fees can be excluded when working out whether there is additional borrowing. A like-for-like remortgage is therefore assessed differently from one where you take money out — which is worth knowing before you decide to add £5,000 to the loan.
Where the buy-to-let market sits right now
Rental cover across the market has been improving. UK Finance reported an average interest coverage ratio of 221% in the first quarter of 2026, up from 204% a year earlier, with the improvement driven by falling borrowing costs rather than by lenders relaxing their criteria.
Average gross rental yields rose over the same period to 7.21%, from 6.93% a year earlier. That is a gross figure, before costs, tax and voids, and it is a national average across a very wide range of local markets.
For a landlord looking at LTV, the practical read is that rental cover is currently less of a constraint than it was two years ago — which is precisely when higher-LTV borrowing becomes achievable for properties that could not have supported it before.
Speak to a buy-to-let mortgage adviser
Whether you are buying an investment property or reviewing the borrowing on one you already own, the useful question is not “what LTV can I get” but “what will this property actually support, and through which lender”. We can work that out with you before you commit to an offer. We also advise landlords living overseas, where criteria and maximum LTVs differ again.
Speak to Visionary Finance about your buy-to-let mortgage on +44 (0) 1908 465 100.
Common questions
What is the maximum LTV on a buy-to-let mortgage?
For most of the market it is 75%, meaning a 25% deposit. A smaller number of lenders offer 80%, and a handful of specialists offer 85% with tighter criteria and higher rates.
How much deposit do I need for a buy-to-let?
At least 25% of the property value for most products. Budget well beyond that for the full purchase, since stamp duty, legal fees, lender fees and a working reserve can add a substantial amount on top.
Why can I not borrow 75% even though I have a 25% deposit?
Because the lender also tests whether the rent covers the interest at a stressed rate. If the property will not achieve the rent the calculation requires, your loan is capped by the rental income rather than by your deposit.
What is an interest coverage ratio?
It is the ratio of expected monthly rent to the monthly mortgage interest at the lender’s stressed rate. 125% is the industry standard minimum, and 145% is common for higher-rate taxpayers.
Does a five-year fixed rate let me borrow more?
Often, yes. Where the rate is fixed for five years or more, the lender is not required to apply the interest rate stress test in the same way, so the rental calculation can be run at a lower rate.
This article is general information about how buy-to-let lending works and is not advice. It is not tax advice. Lending criteria, interest rates, tax rules and regulatory expectations change; the position described is correct at the date of publication.
Worked examples are illustrations of the calculation only. They are not quotations and do not represent products available to you.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Visionary Finance Ltd is authorised and regulated by the Financial Conduct Authority. The FCA does not regulate certain types of mortgage, including some buy-to-let, international, bridging and commercial mortgages.
