If you want to buy a property in the UK to rent out, the deposit is one of the first things to consider. A buy-to-let (BTL) deposit is the money you pay upfront, while the rest is covered by a mortgage.
This guide explains how much deposit you’ll usually need, what can make it higher or lower, where your deposit can come from, and other upfront costs to expect.
For more on rates and lender rules, check our buy-to-let mortgage guide.
How much deposit do you need for a buy-to-let?
Most lenders require at least a 25% deposit. However, if you are buying from outside the UK, you will likely need a larger deposit.
Overseas and non-resident buyers are often asked for a 30% to 40% deposit, as there are fewer lenders and they see more risk. It’s safer to plan for at least 30%.
Here is how the deposit changes with the loan-to-value (LTV), which is the share of the price the lender funds, using a £250,000 property as an example.
What affects how much deposit you need?
Two people might look at the same property but be asked for different deposit amounts. Here are some factors that can affect the deposit:
Your credit and UK history
Lenders typically want to see a history of borrowing. If you do not have a UK credit record, which is common for overseas buyers, many lenders will ask for a bigger deposit to cover the extra risk.
Specialist lenders who work with overseas buyers are usually more flexible, as they look at the property and your overall profile instead of just a UK credit file. You can read more in our guide on getting a UK mortgage as a non-resident.
The rent versus the mortgage
Lenders want to see that the rent will more than cover the mortgage, so they use a stress test. This involves an interest coverage ratio (ICR), which is the rent as a percentage of the mortgage interest.
For basic-rate taxpayers, it is usually 125%, but for higher-rate and most non-resident borrowers, it is 145%, tested at a notional rate of about 5.5% set by the Bank of England’s Prudential Regulation Authority. These numbers can vary by lender and product, and may change over time.
If the rent is not enough, a bigger deposit can lower the loan until it passes.
The property type
The kind of property you buy affects the deposit. A standard flat or house is easiest to fund, while some types push the deposit up because fewer lenders will lend on them:
- A new-build or off-plan property (one bought before it is finished): often around 25% to 30%, and more on some flats, as certain lenders cap how much they lend on new-build flats
- A flat above a shop or other commercial space: often 25% or more, sometimes 35%, because fewer lenders will consider it
- A house in multiple occupation (HMO), rented to several unrelated tenants: usually at least 25%, and more for larger or licensable HMOs
- Unusual or non-standard construction: often 30% or more, as the lender pool is smallest here
The more unusual the property, the bigger the deposit a lender will probably ask for.
First-time landlord or overseas buyer
When there are fewer lenders, you will usually need a bigger deposit. This affects two groups of buyers the most:
- First-time landlords, who have no track record of letting property
- Overseas and non-resident buyers, who are often quoted more than a UK-based landlord for the same property
If you are in either group, it is best to plan for the higher end of the deposit range.
What is loan-to-value, and how does it change your deposit?
Your loan-to-value (LTV) shows how much of the property price the mortgage covers, with your deposit making up the rest.
For example, if you buy a property for £250,000 and put down £75,000, you borrow £175,000, which is a 70% LTV. Here is the breakdown:
- Property price: £250,000
- Deposit: £75,000
- Loan: £175,000
- LTV: 70%
Keep in mind that deposit size and LTV move in opposite directions. Here is a quick way to see it:
- Bigger deposit, lower LTV, better interest rates
- Smaller deposit, higher LTV, more risk for the lender
None of this is guaranteed. A low LTV improves your chances of approval and can help you get a cheaper mortgage, but your final rate still depends on your overall situation.
The good news is your LTV usually goes down over time as you pay off the loan and the property increases in value.
How much deposit do you need through a limited company?
Many overseas landlords buy through a limited company, often set up as a special purpose vehicle (SPV). This type of company is created just to hold rental property.
A limited-company buy-to-let mortgage usually requires a deposit of 25% to 35%, and some lenders prefer 30% or more. The checks are often stricter, and lenders usually want a personal guarantee from the directors, so you are still personally responsible if the company cannot pay.
A company is not automatically the better choice. The tax treatment depends on your own circumstances and current HM Revenue and Customs (HMRC) rules, so speak to a qualified tax adviser before you decide.
If you are weighing up that route, our guide to limited company buy-to-let mortgages compares it in full.
Can you get a buy-to-let with a low deposit (5%, 10% or 15%)?
Low-deposit buy-to-let mortgages do exist, but they are rare, and even rarer if you are buying from abroad. A few specialist lenders offer 15% deposits at 85% LTV, usually for strong UK-resident applicants with a clean record and a property that values easily.
A 5% or 10% deposit is really only possible for residential mortgages, so don’t plan your buy-to-let around it. There’s a trade-off too: a smaller deposit means a higher rate, a tougher stress test, and fewer lenders to choose from.
For most overseas buyers, a deposit below 25% is hard to arrange, though a few specialist lenders might consider it for strong applicants.
Where can your deposit come from?
Lenders accept a deposit from a few sources. The most common are:
- Your own savings
- Equity releasedfrom another property you own
- A gift from close family
What matters as much as the source is having a clear paper trail. Lenders and their solicitors run anti-money-laundering checks, so they need to see where the money came from and how it reached you.
This often trips up overseas buyers. Some lenders want the funds to have already been in a UK account, while others accept money from recognised countries only by referral.
Start gathering 6 months of statements early, and keep a clear record of any large transfer, so a slow check does not delay your purchase.
How much cash do you really need to complete?
The deposit is the highest cost, but it is not the only one. On a buy-to-let, especially if you are an overseas buyer, plan for these extra costs on top of the deposit:
- A 5% stamp duty surcharge on top of the standard rate, which is not refundable.
- A further 2% non-resident surcharge, which you can reclaim only if you later meet the UK residence test.
- Legal fees, valuation fees, and mortgage arrangement fees.
You can find the current rates on GOV.UK, and our foreigner’s guide to buying UK property explains the full cost of completing.
How much cash do you really need to complete?
The deposit grabs the attention, but it is only the headline figure. Once tax and fees are added, the cash you actually hand over on completion day is higher. Plan for:
- Your deposit
- Stamp duty, including the buy-to-let surcharge, plus a non-resident surcharge if you live abroad (the buy-to-let part is not refundable, while the non-resident part can be reclaimed if you later meet the UK residence test)
- A mortgage arrangement or product fee, often around £1,000 to £2,000
- A valuation fee
- Legal and conveyancing fees
- A broker fee on some deals, depending on the lender and the service
As an illustration, take a £250,000 buy-to-let bought by an overseas investor with a 30% deposit:
These figures are just examples. Your actual costs and loan amount will depend on the property, the lender, and your own situation. Stamp duty rates and surcharges can change, so check the latest GOV.UK guidance before you commit, and see our foreigner’s guide to buying UK property for the full picture.
How can you get your deposit right?
Getting the deposit right comes down to three things: budgeting, structure, and timing. Here are the five moves that put overseas investors in the strongest position.
Tip 1: Budget the full cash you need to complete
The deposit is only part of what you pay on completion day. Stamp duty surcharges, legal fees, valuation fees, and arrangement fees can add tens of thousands of pounds on top.
Work out the total cash you will need before you make an offer, and confirm the stamp duty figure early so nothing catches you out at the last minute.
Tip 2: Choose your deposit size on purpose
A bigger deposit is more than just a bigger hurdle. It lowers your LTV, which usually gets you a better rate, an easier stress test, and a wider choice of lenders.
Before you decide on a figure, work out the monthly cost at a lower LTV. Often, a slightly larger deposit pays for itself over the life of the loan.
Tip 3: Prepare your source-of-funds trail early
Lenders and their solicitors have to check where your deposit came from. Money that arrived recently from overseas with no clear history can slow down the anti-money-laundering check.
Gather 6 months of bank statements before you apply, and keep evidence for any gift or transfer. Have the paper trail ready before anyone asks.
Tip 4: Plan around the overseas deposit range
Many buyers plan around the 25% figure they read online, but that describes a UK-resident landlord. As an overseas buyer, you will usually be quoted 30 to 40%.
Assume the higher figure from the start, and treat anything better as a bonus. That way a larger request does not force a last-minute scramble.
Tip 5: Line up a backup before you exchange
Your deposit is exposed the moment you exchange contracts. If the mortgage is not ready by the completion date, you can face penalty interest and, in the worst case, lose the deposit. Overseas mortgages are the most likely to run late.
Have a backup plan before you exchange, while you still have time to arrange it. This could mean using a specialist lender who understands non-resident timelines, agreeing to a longer gap between exchange and completion, or arranging short-term finance, such as bridging loans, to cover a delay.
If your completion date is coming up soon, read our guide on what to do if completion is delayed.
As a rule of thumb, treat the deposit as just one part of your bigger cash plan, and make sure you have a backup for the one thing you cannot control: timing.
Conclusion
Everyone plans for the deposit, but the risk that is often forgotten is timing.
Plan for at least a 25% deposit, and 30% to 40% if you’re an overseas buyer. Budget for stamp duty surcharges and fees on top, and keep a clear record of where your money came from.
Even if you do all of this, one thing is still outside your control: whether the mortgage is ready by completion day. Overseas mortgages are the most likely to run late, and missing the completion date can mean penalty interest or losing your deposit.
This is where a bridging loan can help. GoGoProp can fund your purchase in as little as 10 days, with a decision in 24 hours, so a slow mortgage will not put your deposit at risk. It costs more than a mortgage, but much less than losing the deal.
GoGoProp lends under Money Lending Licence No. 1271/2024.
Key takeaways
- Most buy-to-let mortgages need a deposit of at least 25%, with a typical range of 20 to 40%.
- Overseas and non-resident buyers should plan for 30 to 40%, because fewer lenders serve them.
- The deposit is not the only cash you need. Budget for the stamp duty surcharges and buyer fees too.
- A lower LTV usually means a better interest rate, so a larger deposit can lower your monthly cost.
- Lenders check where your deposit came from, so gather six months of statements before you apply.
- A 5 or 10% buy-to-let deposit is very rare, especially for overseas buyers.
- A bridging loan is a planned way to protect a deposit when a mortgage runs late.
FAQs
What is the minimum deposit for a buy-to-let mortgage?
Most lenders want at least 25%. A small number of specialist lenders offer 15% at 85% LTV, but this is uncommon and usually limited to strong UK-resident applicants with a standard property.
Do overseas buyers need a bigger buy-to-let deposit?
Usually yes. Non-resident buyers are typically asked for 30 to 40%, rather than the 25% a UK resident might pay, because fewer lenders serve them and those that do price in the extra risk of limited UK credit history.
Can I use a gifted deposit or equity for a buy-to-let?
Yes. Lenders accept savings, a gift from close family, or equity released from another property. What matters is a clear paper trail showing where the money came from, so anti-money-laundering checks pass without delay.
Is the deposit bigger if I buy through a limited company?
The deposit sits at a similar level, usually 25% or more and often 30 to 40% for overseas buyers. The main difference is a narrower list of lenders, since fewer offer mortgages to limited companies with overseas directors.
Do I get my deposit back if my mortgage is declined?
Before you exchange contracts, your deposit is not at risk. After exchange, a failed or delayed mortgage can put it at risk, which is why many buyers line up a backup route before the completion date.
