Guide · 9 min read
The 25% norm at 75% LTV, the 80% products, and the deposit routes lenders accept: director's loans, intercompany transfers, gifted funds and retained profit.
Written by Matt Lenzie · Published 10 June 2026
Advice from
Matt Lenzie · 25+ year career banker (Bank of Scotland, Lloyds Banking Group). £300m+ raised for property clients.
25+ year career banker (Bank of Scotland, Lloyds Banking Group). £300m+ raised for property clients.
The deposit for a limited company buy-to-let is the cash the company itself puts towards the purchase, normally 25% of the price, because most lenders cap company buy-to-let lending at 75% loan to value. The money sits in the company's bank account before exchange, the lender traces where it came from, and the balance of the purchase comes from the limited company mortgage.
That single paragraph hides most of what actually matters. Where the 25% figure comes from, when 20% is achievable, why the rental calculation sometimes demands more than either, and, the part that derails more applications than any rate or criteria point, how the money gets into the company and how its provenance is evidenced. We arrange company buy-to-let across a 100+ lender panel, and deposit structure is the first thing we check on every case. This guide sets out the full picture.
The working baseline is 25% of the purchase price. The bulk of the specialist buy-to-let market, Paragon, Fleet Mortgages, Kent Reliance, Foundation Home Loans, Landbay and their peers, caps standard limited company lending at 75% LTV, which means the company funds the remaining 25% plus all purchase costs.
On real numbers:
| Purchase price | Deposit at 75% LTV (25%) | Deposit at 80% LTV (20%) |
|---|---|---|
| £150,000 | £37,500 | £30,000 |
| £200,000 | £50,000 | £40,000 |
| £300,000 | £75,000 | £60,000 |
| £400,000 | £100,000 | £80,000 |
The deposit is not the whole cash requirement. The company also pays stamp duty including the additional-dwelling surcharge, legal fees on both the purchase and the lender's security work, valuation and lender arrangement fees, and usually a small float for the first weeks of ownership. On a £200,000 purchase at 75% LTV, the realistic all-in cash figure is closer to £63,000 than £50,000. Budgeting the deposit alone is the most common planning error we see from first-time company landlords.
Note what the deposit is a percentage of: the lower of purchase price and valuation. If the surveyor values the property below the agreed price, the loan is calculated on the valuation and the company bridges the gap with extra cash. We come back to that under the stress test, because the two interact.
The 75% ceiling is an equity cushion, and it exists for the lender's benefit, not yours. Buy-to-let is interest-only lending against an income-producing asset; the lender's protection against a falling market, a void period or a forced sale is the 25% of value that is not theirs. The Prudential Regulation Authority's underwriting expectations for buy-to-let (supervisory statement SS13/16) pushed the whole market towards consistent, evidenced affordability testing, and the LTV cap is the asset-side counterpart of that discipline.
It is worth being clear that company status itself is not the reason for the cap. Personal-name buy-to-let carries broadly the same LTV ceilings. The difference for a limited company is in pricing and legal work (personal guarantees from the directors, a check on the company at Companies House, sometimes a debenture), not in a tighter LTV. A clean special purpose vehicle with the right SIC code accesses the same 75% as a personal applicant, and the same 80% niche, on the panel that lends to companies.
Certain property and case types do bring the cap down:
A material one, and it moves in steps rather than smoothly. Limited company mortgage pricing is banded by LTV, with typical break points at 75%, 70%, 65% and 60%. Each band down buys a cheaper rate, and the gap between the 75% band and the 65% band is usually the widest single step, often 0.3% to 0.5% on the rate depending on the lender and product shape.
On a £200,000 property, the difference between a 25% deposit (£150,000 loan) and a 35% deposit (£130,000 loan) is £20,000 of extra cash. If the bigger deposit moves the rate from, say, 5.7% to 5.3%, the interest saving is roughly £1,610 a year on the smaller loan. Whether that is a good use of £20,000 depends entirely on what else the company could do with the money, for a portfolio builder, the £20,000 is usually worth more as the seed of the next deposit. For a single-property company prioritising cash flow, the lower band can make sense. Our stress test calculator lets you run both versions in a couple of minutes.
Watch the fee structure alongside the rate when comparing bands, because limited company products lean heavily on percentage arrangement fees, commonly 2% to 5% of the loan on the lowest headline rates. A low-rate, high-fee product at 75% LTV can cost more over a five-year fix than a plainer product one band lower, and the fee is usually added to the loan, which nudges the true LTV back up. We compare products on total cost over the fixed period, not headline rate, and the gap between the two rankings is frequently the price of a kitchen.
The deposit also buys resilience that never shows up on a rate sheet:
This is the question lenders actually underwrite. A company, especially a newly incorporated SPV, has no savings history of its own, so the deposit almost always originates with the people behind it, and the route the money takes into the company matters as much as the amount.
In the overwhelming majority of cases the director lends personal money to the company, recorded as a credit to the director's loan account. This is the route lenders expect, the paperwork is light (a simple loan agreement and the company's books), and it carries a long-term advantage: the company can repay the loan to the director tax-free as rental profit accumulates, before any dividend needs to be declared. The full mechanics are in our guide to director's loan deposits.
Where a director owns a trading company holding surplus cash, that company can lend the deposit to the SPV. Lenders accept this, but they want a clean structure: a written intercompany loan agreement, confirmation that the lending company's own bankers have no charge over the cash, and clarity on whether the loan is subordinated to the mortgage. Some lenders insist the intercompany loan is interest-free or that repayments are restricted while the mortgage runs. Done properly it works well; done informally it stalls applications. Group structures with a holding company over both entities are cleaner still.
Family gifts are acceptable to most of the panel, usually gifted to the director personally and then lent into the company, accompanied by a gift letter confirming no repayment and no interest in the property. A minority of lenders restrict the acceptable donor list to close family. Where the donor wants security or eventual repayment, that is not a gift but a loan, and it needs disclosing as one; mislabelling it is the kind of discrepancy that surfaces at underwriting and stalls the case.
Where two or more shareholders fund the purchase, each contribution sits as a separate director's loan (or shareholder loan), each with its own provenance trail. Lenders are comfortable with multi-director deposits; what they want is clarity, who lent what, documented individually, rather than a single pooled transfer with no breakdown. Uneven contributions are normal and do not need to mirror the shareholding, although the mismatch has tax and exit consequences worth agreeing in writing between shareholders on day one, and worth a conversation with your accountant.
An established property company can fund the next deposit by remortgaging an existing asset and releasing equity, the standard compounding mechanism for portfolio builders. The released cash is clean provenance because it comes from a regulated remortgage transaction the lender can see. Directors sometimes release equity from their own home for the same purpose; that personal remortgage is a regulated transaction we would refer to an FCA-authorised firm, but the resulting cash then enters the company as an ordinary director's loan.
Not in the form people hope. There is no 100% limited company buy-to-let mortgage, and any structure promising one deserves suspicion. What exists instead are three legitimate ways to reduce or substitute the cash requirement:
1. Buying below market value. A few lenders will lend against open market value rather than purchase price where there is a genuine reason for the discount, an inter-family sale, a distressed purchase. If the company buys at £160,000 a property valued at £200,000, a 75% LTV loan of £150,000 means only £10,000 of cash. Most lenders still lend against the lower of price and value, so this is a minority-of-the-panel exercise.
2. Bridge, refurbish, refinance. The company buys with bridging finance, adds value through works, then refinances onto a term limited company buy-to-let mortgage against the improved value. The uplift created by the works becomes the equity. This works, we arrange it regularly, but bridging costs are real and the exit valuation has to be conservative for the numbers to hold.
3. Additional security. Some lenders take a charge over a second unencumbered property the company owns in place of part of the cash deposit. Useful for asset-rich, cash-light companies, at the price of cross-collateralising the portfolio.
All three reduce cash in, none of them removes the equity requirement. The lender always wants 20% to 25% of value that is not theirs; the only question is whether it arrives as cash or as value the company already controls.
The LTV cap is only one of two ceilings on the loan, and the deposit has to satisfy whichever bites first. The other is the interest coverage ratio: lenders require the rent to cover a notional stressed interest payment, typically 125% cover for limited companies at a stress rate of around 5.5% (the personal-name equivalent is 145% for higher-rate taxpayers, one of the structural advantages of the company wrapper). Five-year fixed rates are usually tested at the actual pay rate instead, which lifts the ceiling.
Run the numbers on a £200,000 purchase renting at £950 per month:
Here the LTV cap binds first and the 25% deposit stands. But rent the same property at £800 per month and the ICR ceiling drops to £139,636, below the 75% LTV figure. The company can now only borrow £139,636, so the real deposit requirement is £60,364, just over 30%, regardless of what the LTV band says. In low-yield areas, particularly central London and the premium commuter belt, the stress test, not the LTV cap, sets the deposit. In high-yield northern markets the LTV cap almost always binds first. Our location pages show how the arithmetic lands town by town, and the stress test calculator does the calculation for any rent and price you give it.
A valuation has two parts on buy-to-let: the capital value and the surveyor's opinion of market rent. A rental downgrade tightens the ICR ceiling exactly as a capital down-valuation tightens the LTV ceiling, and both translate into the same thing: more deposit, found at short notice. Building 5% of headroom into the cash plan is cheap insurance.
A complete picture, the kind we build for every case before an application goes anywhere near a lender. The company is a new SPV with SIC code 68209, buying a £220,000 terraced house renting at £1,100 per month, on a five-year fixed limited company buy-to-let mortgage at 75% LTV.
| Item | Amount |
|---|---|
| Purchase price | £220,000 |
| Mortgage at 75% LTV | £165,000 |
| Deposit (25%) | £55,000 |
| Stamp duty incl. additional-dwelling surcharge | £13,100 |
| Legal fees, searches, lender's legals | £2,200 |
| Valuation and lender fees (typical, fee-added products vary) | £500 upfront |
| Total cash into the company | £70,800 |
The director transfers £71,000 into the company account as a director's loan, documented with a one-page loan agreement. Stress test check: £13,200 annual rent against a £165,000 loan tested at the five-year pay rate comfortably clears 125% cover. The £71,000 sits as a credit the company can repay to the director, tax-free, out of future rental profit. That repayment right is one of the quiet advantages of the company structure, and it starts with documenting the deposit properly on day one.
Deposit provenance is an anti-money-laundering requirement, every lender checks it, and it is one of the most common avoidable reasons limited company applications get declined or stall. The standard is simple to state: the lender must be able to trace the deposit from its origin to the company's account through documents, not explanations.
What the file should contain:
Two practical rules from our broker desk. First, move the money in one traceable step where possible; every intermediate hop between accounts is another statement the underwriter requests and another week on the timeline. Second, get the money into the company before application rather than during it; a deposit already sitting in the company account with its paper trail attached is a non-event at underwriting, while a deposit that materialises mid-application invites questions.
If the deposit involves anything unusual, cryptocurrency proceeds, overseas funds, money from a business sale still completing, tell us at the first call. There is a lender for most of it, but only if the case is packaged for the right one from the start. That triage is the heart of what we do on limited company buy-to-let mortgages: structure first, then deposit route, then the panel.
If the company is not yet incorporated, start with our guide to setting up an SPV for buy-to-let so the SIC code and structure are right before the deposit moves anywhere. If the structure exists and the question is purely how much cash you need, the sequence is: confirm the target LTV band, run the rent through the stress test calculator to see which ceiling binds, add stamp duty and costs, then add 5% headroom for valuation risk. Or send us the numbers and we will do it with you on a 15-minute call, fee-free, before any application is made.
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