A buy-to-let mortgage is what you need when you are buying a property to rent out rather than to live in. The two things that surprise people most are that the deposit is considerably larger than on a residential mortgage, usually starting at 15% but far more commonly 25%, and that how much you can borrow is based mainly on the rent the property will achieve rather than on your own income. What you plan to do with the property matters too, because a standard tenancy, a holiday let and an HMO are three very different propositions to a lender.
Key takeaway: Plan for a 25% deposit unless you have a reason not to. Smaller deposits exist, but they narrow your choice of lender considerably and come at a higher rate. Beyond the deposit, the two decisions that shape everything else are how you intend to let the property and whether you buy it personally or through a limited company.
[[stats: 15% = The smallest deposit available, from very few lenders | 20% = Opens up more lenders and better rates | 25% = Where most of the market sits]]
How much deposit do you need for a buy-to-let mortgage?
More than you would need for a home you intend to live in. Residential mortgages are available from 5% deposits, and in some cases with no deposit at all, but buy-to-let lending starts a good deal higher.
The market breaks into three broad tiers, and the difference between them is not just whether you can borrow at all, but how many lenders will look at you and what rate you end up paying.
[[table: Deposit | Lender choice | What to expect ;; 15% | Very limited | Only a small number of lenders operate at this level, and rates are noticeably higher. Criteria tends to be tighter in other respects too. ;; 20% | Wider | More lenders will consider it, though rates are still slightly higher than at the top tier. ;; 25% | The bulk of the market | Most buy-to-let lenders price their mainstream products here, so this is where the widest choice and the most competitive rates sit.]]
The practical implication is that stretching to 25% is usually worth doing if you can. Going from 20% to 25% costs more up front but often pays for itself through a lower rate across the term, and it opens the door to lenders who would not otherwise consider the case. A mortgage broker at Quanstrom Financial can run the numbers both ways so you can see the difference in real terms rather than in theory.
How do lenders decide how much you can borrow?
This is the part that differs most from a residential mortgage, and it catches out plenty of first-time landlords.
On a residential mortgage, borrowing is based on a multiple of your income. On a buy-to-let, it is based mainly on the rent the property is expected to achieve. Lenders apply what is known as a rental stress test, or interest coverage ratio, which asks whether the rent would still comfortably cover the mortgage interest if rates were higher than they are today.
In practice the lender takes the expected monthly rent, applies a notional interest rate that is usually well above the rate you would actually pay, and checks that the rent covers that stressed payment by a set margin. That margin commonly sits at around 125% for basic rate taxpayers and for limited company borrowers, and typically rises to 145% or higher for higher rate taxpayers, with HMOs and multi-unit properties often stressed harder still. The figures vary between lenders, and this is one of the areas where whole of market access genuinely changes the answer.
Good to know: Because the stress test looks forward rather than at today's rate, a property can be genuinely profitable at the rate you would actually be paying and still fail a lender's assessment. It is also why five-year fixed rates are often used on buy-to-let cases: lenders can apply a gentler stress rate when they know what you will be paying for longer.
Many lenders apply no minimum income requirement at all, which surprises people who assume a salary is needed to qualify. Where a minimum does apply it is normally around £25,000, and it sits separate from the rental calculation rather than replacing it. Plenty of lenders will also want you to already own your own home, though neither of these is universal and there are lenders who take a different view on both.
Is there a maximum age for a buy-to-let mortgage?
Age is far less of an obstacle on buy-to-let than most people assume, and it is one of the areas where lenders differ most dramatically. A good number of lenders set no maximum age at all.
There are two separate limits, and they are easily confused. The first is the maximum age at which you can apply. The second is the maximum age you can reach by the end of the mortgage term. A lender can be completely relaxed about one and quite firm about the other, so both are worth checking before you rule yourself out.
[[table: Lender | Maximum age at application | Maximum age at end of term ;; Leeds Building Society | No age limit | No age limit ;; HSBC | No age limit | No age limit ;; Cambridge Building Society | No age limit | No age limit ;; BM Solutions | Must apply before 75 | 99 ;; Santander | 79 | 85 ;; NatWest | Must apply before 77 | 80 ;; Barclays | 74 | 80]]
Lender criteria correct as at 22 August 2026. Criteria in this area changes, so please check with an adviser rather than relying on this table alone.
The spread in that table is the point. A borrower in their late seventies has no route at all with some lenders and a perfectly ordinary application with others, and the difference is simply which lender the case is placed with. If you are concerned about your age when applying for a buy-to-let mortgage, you may not need to panic. Speak to a mortgage broker at Quanstrom Financial to see how we can help.
Interest only or capital repayment?
Most buy-to-let mortgages are taken on an interest only basis, which is unusual compared with residential lending, where repayment is the norm. Both are available and neither is inherently better.
On interest only, your monthly payment covers just the interest. The balance does not reduce, so at the end of the term you still owe what you originally borrowed. The advantage is cash flow: the monthly payment is considerably lower, which leaves more of the rent as income and gives you more headroom if the property sits empty for a period or needs work.
On capital repayment, each payment chips away at the balance as well as covering the interest. The monthly cost is higher and the rental income it leaves you with is lower, but the debt reduces steadily and the property is eventually owned outright.
Which suits you depends on what the property is for. If the objective is monthly income now, interest only does that job better. If the objective is owning the property outright in twenty years, or you would rather not be relying on selling or refinancing at the end of the term, repayment gets you there. Some landlords use interest only in the early years while building a portfolio and switch later. There is no general right answer, and it is worth thinking about the exit as much as the monthly figure.
Enter your own figures below to see both options side by side, so you can weigh the monthly saving against the balance that would still be outstanding at the end of the term.
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What kind of letting are you planning?
This is the question that most often determines which lenders can help, and it is worth being clear about it from the outset. A standard buy-to-let mortgage is designed for one specific scenario, and anything outside it needs a different product.
[[accordion: A single property let on a standard tenancy agreement|This is what a standard buy-to-let mortgage is built for: one property, let to one household on an assured shorthold tenancy. It is the most straightforward scenario, it attracts the widest choice of lenders, and it is where the most competitive rates sit. If this is your plan, a mainstream buy-to-let product is the one you want. ;; A holiday let or short-term let|Letting a property on a short-term or holiday basis needs a specialist mortgage rather than a standard buy-to-let. Income is seasonal and less predictable, so lenders assess it differently, often using low, mid and high season rates rather than a single monthly rent figure. Fewer lenders operate in this space and criteria varies widely. It is also worth noting that the tax treatment of holiday lets changed in April 2025, so speak to an accountant before assuming older guidance still applies. ;; A house in multiple occupation (HMO)|An HMO is a property rented to at least three people from more than one household who share facilities such as a kitchen or bathroom, and a mandatory licence is generally required where five or more tenants from more than one household share those facilities. HMOs need a specialist lender. The rental yield is often higher, but so is the complexity: licensing, room sizes, fire safety requirements and local council rules all come into it, and lenders apply a higher rental stress test. ;; A multi-unit freehold block (MUFB)|A MUFB is a single freehold title containing several self-contained flats, each with its own kitchen and bathroom. It looks similar to an HMO from the outside but is treated differently, and it also requires a specialist lender. Valuation can work differently too, since some lenders value the block as a whole and others value the individual units, which can change how much you are able to borrow. ;; Letting out the home you already live in|If you are moving house but want to keep and let your existing property, that is usually a let to buy arrangement rather than a standard purchase. It works differently and is worth reading up on separately.]]
If the last of those applies to you, our guide to let to buy mortgages covers it in detail. If you are buying an additional property for another reason entirely, our guide on mortgaging a second home may be the more relevant read.
Should you buy personally or through a limited company?
This is one of the most common questions we are asked, and it is genuinely important. It is also, in large part, a tax question rather than a mortgage one, so what follows is a general summary only. Quanstrom Financial does not give tax or accountancy advice, and we would always recommend speaking to an accountant before deciding how to structure a purchase.
In broad terms, the two routes differ like this.
Buying personally is simpler. There is no company to set up, run or file accounts for, the mortgage market is larger, and rates and fees are generally lower. The trade-off sits on the tax side: rental profit is taxed as part of your personal income, and the way tax relief on mortgage interest works for individual landlords changed some years ago in a way that particularly affects higher rate taxpayers.
Buying through a limited company, usually a special purpose vehicle set up for the purpose, is treated differently for tax, which is why a great many landlords now use this route. Profits are taxed as company profits rather than personal income, and mortgage interest is treated as a business cost. Against that, there is the administrative burden of running a company, and on the mortgage side both rates and lender fees tend to be higher than the equivalent personal products, which eats into some of the benefit. Taking money out of the company for your own use also has tax consequences of its own.
Which is better depends on your tax position, how many properties you own or intend to own, whether you need the rental income to live on, and your longer-term plans for the portfolio. It genuinely varies from person to person, and it is not a decision to make on a rule of thumb. Speak to an accountant about the tax, and a mortgage broker at Quanstrom Financial about what each route means for the lending, and you will have the full picture. If you already run a company, our guide on mortgage affordability for limited company directors may also be useful.
What else should you budget for?
The deposit is the biggest number, but it is not the only one.
Stamp duty is the one that catches people out. In England and Northern Ireland an additional property surcharge of 5 percentage points is added to every standard stamp duty band when you buy a property that is not replacing your main residence, which on a buy-to-let purchase means a meaningfully larger bill than a home mover would pay on the same property. Scotland and Wales operate their own equivalent systems.
Beyond that, expect valuation and lender arrangement fees, which on buy-to-let products are often percentage-based rather than flat, legal fees, and the cost of getting the property ready to let, including any safety certificates and licensing. Landlord insurance is a separate product from ordinary home insurance, and most lenders will require appropriate cover to be in place.
It is also worth budgeting for voids. A property that is empty between tenancies still has a mortgage payment due on it, and lenders and experienced landlords alike tend to assume the property will not be let every single month of the year.
Where to start
If you are considering a first buy-to-let, the most useful thing you can do before you start viewing properties is to establish what you could realistically borrow, since the rental stress test rather than your salary is what sets the ceiling. That tells you what price bracket is actually open to you, and it stops you falling for a property the numbers will not support.
Quanstrom Financial is whole of market, which matters more on buy-to-let than on almost any other type of lending, because the difference between lenders on stress tests, minimum income rules, age limits, property types and company lending is substantial. Whether you are buying your first rental property or adding to a portfolio, we can work through the options with you and explain what each route would mean in practice.
Frequently asked questions
How much deposit do you need for a buy-to-let mortgage?
Most buy-to-let lending is based on a 25% deposit, which is where the widest choice of lenders and the most competitive rates sit. Deposits of 20% and even 15% are available, but from a much smaller pool of lenders and at higher rates.
Is there a maximum age for a buy-to-let mortgage?
Not with every lender. Leeds Building Society, HSBC and Cambridge Building Society all set no maximum age either at application or at the end of the term, while others do apply limits: Barclays caps applications at 74 and the term at 80, NatWest requires you to apply before 77 with a term ending by 80, Santander allows applications to 79 with a term ending by 85, and BM Solutions requires you to apply before 75 but allows the term to run to 99.
Do you need a minimum income for a buy-to-let mortgage?
Not necessarily. Many lenders apply no minimum income requirement at all on buy-to-let, because the borrowing is assessed against the rent the property produces rather than your earnings. Where a lender does set a minimum it is normally around £25,000, so a low or unusual personal income is rarely the obstacle people expect it to be.
Can you get a buy-to-let mortgage as a first-time buyer?
It is possible but considerably harder, because most lenders prefer applicants who already own their own home. A smaller number of lenders will consider first-time buyers for a buy-to-let, usually with tighter criteria, so it is worth taking advice rather than assuming you are excluded.
How do lenders work out how much I can borrow on a buy-to-let?
Borrowing is based mainly on the rent the property is expected to achieve rather than on your income. The lender applies a rental stress test, checking that the rent would still cover the mortgage interest by a set margin if rates were higher than they are today, which is why a property can be profitable at current rates and still fall short of a lender's assessment.
Should a buy-to-let mortgage be interest only or repayment?
Interest only keeps the monthly payment lower and leaves more of the rent as income, but the balance does not reduce and still has to be repaid at the end of the term. Repayment costs more each month but clears the debt over time. Which suits you depends on whether your priority is monthly cash flow or owning the property outright.
Do I need a special mortgage for a holiday let?
Yes. A standard buy-to-let mortgage is designed for a property let on a standard tenancy agreement, so short-term and holiday letting needs a specialist product. Fewer lenders operate in this area and they assess the seasonal income differently.
What is the difference between an HMO and a multi-unit freehold block?
An HMO is a property where tenants from more than one household share facilities such as a kitchen or bathroom. A multi-unit freehold block is a single freehold title containing several self-contained flats, each with their own facilities. Both need a specialist lender, and they are valued and assessed differently from one another.
Is it better to buy a rental property personally or through a limited company?
It depends on your tax position, your plans for the portfolio and whether you need the rental income to live on. Company ownership is treated differently for tax, which is why many landlords use it, but mortgage rates and lender fees tend to be higher and there is a company to run. This is a tax question as much as a mortgage one, so speak to an accountant alongside your adviser.
Do you pay extra stamp duty on a buy-to-let?
In England and Northern Ireland an additional property surcharge of 5 percentage points is added to each standard stamp duty band when the purchase is not replacing your main residence. Scotland and Wales have their own equivalent systems, so the figure differs depending on where you are buying.
Can you live in a property with a buy-to-let mortgage?
No. Buy-to-let mortgages are for properties let to tenants, and living in the property yourself would breach the terms of the mortgage. If your circumstances change, speak to your lender or adviser rather than simply moving in.
Do I need life insurance to get a mortgage?
No, life insurance is not a legal requirement and lenders do not generally insist on it, although buildings insurance is required. Quanstrom Financial strongly recommends life cover to anyone whose family depends on their income, because a mortgage becomes a debt of your estate if the worst happens. Our guide on whether you need life insurance for a mortgage explains what is genuinely required and what is worth considering.
Written by Toby Quanstrom CeMAP, Director at Quanstrom Financial, a whole of market mortgage broker based in Eastbourne, East Sussex.
This article is for general information only and does not constitute advice, and nothing in it should be taken as tax or accountancy advice. Please speak to an adviser about your own circumstances, and to an accountant about how a purchase should be structured.
Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.
Your property may be repossessed if you do not keep up repayments on your mortgage.
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