Landlord guide

Your next deposit might already be sitting in your rentals.

Most landlords I speak to are saving for their next deposit while it’s already there, locked up in the houses they own. Here’s how to find out how much, in about a minute.

The 60 second version

What it’s worth today (use recent local sold prices)	£210,000
Lenders commonly go up to 75% of value	£157,500
Take off what you owe now	−£110,000
Could release, before costs	£47,500

£47,500 is a 25% deposit on a £190,000 buy to let. From a house you already own. That’s the exciting bit. Now the bit that catches people out. (Want to try your own figures? Use our free equity release calculator.)

The rent test that quietly caps it

Lenders don’t just look at value. They check the rent covers the new, bigger mortgage by a healthy margin, worked out at a test interest rate that’s usually higher than the one you’ll actually pay. If the rent falls short, the loan gets cut, even though the value says 75%.

In the example: at £1,050 a month rent, some lenders would happily lend the full £157,500 and others would stop well short. Same house, same landlord, very different answers. The margin and test rate depend on the lender, the product, and whether you own the property yourself or through a limited company.

This is why two landlords with identical houses can get very different results. It’s also the main reason it’s worth speaking to a broker before you assume the answer is no.

Timing is half the game

Still in a fixed rate? Leaving early can cost thousands in early repayment charges. The sweet spot is usually the few months before your fix ends.
Rent gone up since you last borrowed? A higher rent can unlock a bigger loan under the rent test.
Values moved in your area? Check recent sold prices on your street before you assume either way.

Don’t forget the other side of the sum

A bigger mortgage means a bigger monthly payment, so your income from that property drops. And your next purchase needs more than the deposit: stamp duty at the higher rate for additional homes, legal fees, and whatever the new place needs doing. Run both sides before you get excited.

The best time to find out what you could release is before your fixed rate ends, not the week after you’ve found the next property.

See it for your own rentals. The PropSignals Portfolio Builder checks each property’s value against recent local sales and its rent against homes to let nearby, then shows your equity, your loan to value and roughly how much a remortgage to 75% could release. It also reminds you when each fixed rate ends. When you want to act, ask for a free call with a mortgage broker.

SEE THE PORTFOLIO BUILDER

General information, not financial or mortgage advice. Your property may be repossessed if you do not keep up repayments on your mortgage. Most buy to let mortgages are not regulated by the Financial Conduct Authority.