Buy-to-let LTV: How much deposit do I need?
The minimum deposit needed for a buy-to-let is now just 15% with some lenders, so you could get an 85% LTV mortgage. However, in order to achieve a mortgage with this LTV rate you would require both a suitable property and sufficient rental income. The LTV is the loan to value ratio, which means the size of the loan compared to the value of the property, expressed as a percentage.
So, a property worth £100,000 and a loan of £75,000 = 75% LTV. Typically, buy-to-let mortgage LTVs are capped at 75% with most lenders. A deposit of 25% is required, though in certain circumstances, 80-85% deals are available.
The impact buy-to-let loan to value has on rates is huge, as it’s a big factor for the lenders when pricing the level of risk. A high LTV equates to higher risk of them not recouping money in the event of default, which in turn means higher rates.