Buy to Let • Bad Credit
With bad credit, the first question is often: How much deposit do I need? The answer depends on the type and recency of your credit issue, plus the lender’s criteria. Here’s what to expect and how to strengthen your case.
Shortcut: See our full guide → Buy to Let Mortgages with Bad Credit.
Standard Buy to Let Deposit Rules
- For clean credit, the standard deposit is 25% (75% LTV).
- The stronger your credit and rental income, the more flexible lenders can be.
Deposit Rules with Bad Credit
With bad credit, lenders see more risk — so the deposit required usually increases.
| Bad Credit Type | Typical Deposit Required |
|---|---|
| Missed payments / small defaults | 25–30% |
| Larger defaults / multiple defaults | 30–35% |
| CCJs | 30–40% depending on recency and size |
| IVA / DMP (active or recent) | 35–40% |
| Bankruptcy (discharged 3+ years) | 35–40%+ |
Rule of thumb: the more recent or severe the issue, the larger the deposit you’ll need.
Why Deposit Size Matters
- Reduces lender risk — more equity protects the lender.
- Improves stress tests — lower LTV makes rental coverage easier.
- Opens more lenders — many will only consider adverse cases at 30–40% deposits.
Case Studies
Case A — Defaults, 30% Deposit
Matt had two small defaults from 2021. With a 30% deposit, a specialist lender approved his Buy to Let at a competitive rate.
Case B — IVA, 40% Deposit
Claire completed her IVA in 2022. With a 40% deposit, she secured approval with a niche lender that accepts recent insolvency cases.
Tips to Improve Approval with a Bigger Deposit
- Save beyond the minimum — aim for 30–40% if your credit is poor.
- Budget for costs — arrangement fees, legals, valuation, and stamp duty.
- Evidence rental income — higher yields strengthen your case.
- Use a broker — some lenders don’t advertise their bad credit BTL criteria.
Related reading: Buy to Let After Bankruptcy – How Long Do You Need to Wait?
Check all three credit files in one place
Use our partner link to view your data across agencies. This won’t harm your score.
FAQs — Deposits for Bad Credit Buy to Let
Can I get a Buy to Let with 25% deposit and bad credit?
Sometimes, but many lenders will want 30% or more.
Do I always need 40% if I’ve had bankruptcy or IVA?
Not always, but it makes approval much easier.
Does the size of the default or CCJ matter?
Yes. Small issues may be accepted with 25–30%; larger ones need more.
Do high street banks accept bad credit BTL?
No — only specialist lenders will consider.
Will a bigger deposit mean better rates?
Yes. More equity strengthens your case and typically lowers the rate.
