This article explores funding a buy-to-let deposit without selling, covering remortgaging, secured loans and equity partnership arrangements.
25/09/2026By Sunil Chander · Co-Founder
This article explores funding a buy-to-let deposit without selling, covering remortgaging, secured loans and equity partnership arrangements.
For landlords who want to expand their portfolio, the deposit requirement is often one of the principal obstacles. Most buy-to-let lenders expect at least around 25% of the purchase price upfront, although some may accept a lower deposit with fewer product options and higher rates. While the investment case for adding another property may be clear, pulling together that level of capital in cash is often not straightforward.
Selling an existing asset to unlock the funds is one option, but it is not the only route. Several established forms of buy-to-let deposit funding allow a landlord to act on an opportunity without liquidating part of their portfolio. This article explores the options available to landlords.
1. Remortgaging to release equity
The most widely used approach to raise a deposit for buy-to-let property is remortgaging an existing property to release accumulated equity. When a property has increased in value, a landlord can replace the existing mortgage with a new, larger one and withdraw the difference as a cash lump sum. That money can then be applied as the deposit on a new purchase.
This approach can work on an existing rental property, provided there is sufficient equity in the asset. Lenders will reassess the property's value, the borrower's circumstances and, where the property is already let, rental income coverage before agreeing terms. The level of equity that can be released is therefore not unlimited. Total borrowing across the property must stay within the lender's maximum loan-to-value threshold, which commonly sits around 75% for buy-to-let remortgages, although some lenders may offer higher or lower limits depending on the property, borrower and product.
Lenders also apply a rental stress test. This usually means the monthly rent cover must exceed the mortgage interest, often calculated at a stressed rate rather than the actual deal rate. The required interest cover ratio can vary depending on the lender, product, borrower tax position and ownership structure.
One practical consideration is timing. If the existing mortgage is still within its fixed-rate period, early repayment charges may apply, and the cost of exiting early can erode the benefit of the funds released. In those cases, waiting until the fixed period ends before proceeding may make better financial sense.
2. A secured loan for a deposit
Where remortgaging is impractical, a second charge or secured loan for a deposit is an alternative worth examining. A second charge mortgage sits behind the primary mortgage on the property without disturbing the first charge arrangement. The landlord borrows against the available equity and receives the funds as a lump sum, which can then be used as landlord deposit finance for a new acquisition.
This route is particularly relevant when the existing mortgage carries a favourable rate that would be lost on a full remortgage, or where early repayment charges make switching the primary mortgage uneconomical. Combined borrowing across both charges will be capped by the lender's criteria, and the property will usually need to satisfy rental cover requirements after both loans are taken into account. The first charge lender will generally need to provide consent for a second charge to be placed, and some buy-to-let lenders do not permit this arrangement at all.
Interest rates on second charge products tend to be higher than on first charge mortgages, reflecting the elevated risk to the second charge lender. For landlords who need to release equity for a deposit while preserving a competitive existing deal, however, the added cost may be justified.
3. The equity partnership model
Pauzible enables landlords to release up to £500,000 per property over a chosen term of two, three, or five years. The ongoing cost is split between a monthly rent share and a separate interest cost, which can be paid monthly or deferred to the end of the term.
At the end of the term, the landlord either repays a fixed principal amount agreed upfront or a property value-linked amount that reflects the property's value at settlement, provided that the settlement happens after year three of the term; settling sooner uses whichever is higher between the property's value at that point and its value when the arrangement began, and any deferred interest falls due in full at the same time. The landlord can exit at any point by selling the property, remortgaging or repurchasing Pauzible's share.
To explore funding scenarios and find out how much equity you may be able to release, try our helpful calculator.
Which option suits your circumstances?
The right choice will depend on the equity available in existing properties, the terms of any current mortgage, and the landlord's appetite for additional borrowing. Remortgaging offers the most straightforward path where there are no early repayment charges and sufficient equity is present. A secured loan is better suited to situations where the existing deal is worth preserving, and the combined loan-to-value position allows further borrowing. An equity partnership offers an alternative route to financing; the rent share, interest cost and repayment or early exit cost should all be considered.
Landlords should also factor in the wider cost of the next purchase, including stamp duty land tax, legal fees, valuation fees, broker fees and product fees. The deposit is only one part of the overall funding requirement.
Conclusion
Growing a buy-to-let portfolio does not require a landlord to sell what they already own. Remortgaging, second charge mortgages and equity partnership arrangements each offer a viable route to fund a property deposit using equity already held within existing assets.
The most appropriate route will depend on a landlord's current mortgage terms, overall debt position, rental income, future borrowing plans, and preference for how to structure the release. Taking professional financial advice before committing to any of these routes is recommended. To learn more about equity partnership with Pauzible, contact our team.
FAQs
Q. How much deposit do I need for a buy-to-let mortgage?
A. Most buy-to-let lenders require a deposit of at least around 25% of the purchase price, though some will accept less with fewer product options and higher rates available at that level. Some lenders may require a larger deposit depending on the property, borrower and rental income. The larger the deposit, the more competitive the rates a landlord can typically access.
Q. Can I use a remortgage to fund a buy-to-let deposit?
A. Yes. Remortgaging a property to release equity is a common approach to buy-to-let deposit funding. The equity becomes a cash lump sum applied as the deposit on a new purchase, provided the remortgage stays within the lender's loan-to-value limits and affordability requirements.
Q. What is a second-charge mortgage and how does it help with landlord deposit finance?
A. A second charge mortgage sits behind an existing primary mortgage on a property without replacing it. It allows a landlord to release equity for a deposit while keeping the first charge intact, which can be useful where early repayment charges make a full remortgage uneconomical.
Q. Will my existing lender need to approve a second-charge mortgage?
A. In most cases, yes. The first charge lender will typically need to provide consent before a second charge can be placed on the property. Some buy-to-let lenders do not permit second charges at all, so confirming this with the existing lender before proceeding is an essential first step.
Q. How much equity can I release through remortgaging a buy-to-let property?
A. The amount is constrained by the lender's maximum loan-to-value threshold and the property's rental income coverage. Many buy-to-let remortgages are capped around 75% LTV, although some lenders may consider higher or lower limits depending on the product, borrower and property type. The interest coverage ratio can also vary between 125% and 145% and also be subject to stressed, i.e. hypothetically higher, interest rates.
Q. Are there alternative options to raise a deposit for buy-to-let?
A. Yes. Equity partnership arrangements like Pauzible's enable landlords to release a portion of a buy-to-let property's value as a cash lump sum. A monthly rent share and a separate interest cost (some of which can be deferred) are paid, with a final repayment due at the end of the chosen term. Speak to Pauzible to learn more about our offering.
Q. How quickly can I access funds to fund a property deposit?
A. Timelines vary by method. Remortgaging typically involves a valuation and affordability assessment, which can take several weeks. Second charge mortgages can sometimes be arranged more quickly, depending on the lender and the complexity of the case. Equity partnership arrangements, such as Pauzible's, can have an application-to-funding timeline of three to four weeks.
Q. Can I use a secured loan for a deposit if I have multiple buy-to-let properties?
A. Yes. Portfolio landlords may be able to take secured loans against individual properties within a portfolio, provided the chosen property has sufficient equity and meets lender criteria. A specialist broker familiar with portfolio lending is the most useful starting point.
Q. Does releasing equity for a deposit affect my ability to get the new buy-to-let mortgage?
A. It can. Lenders may factor in new debt taken on to fund the deposit when assessing the new mortgage. A remortgage or second charge that raises monthly outgoings may affect affordability or rental income coverage calculations, so modelling both transactions with a broker first is advisable.
Q. Is there a minimum equity position required to release equity for a deposit?
A. Yes. For remortgaging and second charge mortgages, combined borrowing is usually limited by the lender's maximum loan-to-value criteria. Many mainstream buy-to-let options sit around 75% LTV, but the exact limit varies by lender, product and property type. The property will need to hold enough equity after the new borrowing is taken into account.
About the author
Sunil Chander
Co-Founder
Sunil oversees operations and compliance at Pauzible, drawing on his extensive experience as the founder and CEO of Dawnbud Limited, a financial services consulting firm. His prior career included senior roles in investment banking at Smith New Court and NatWest. He holds an MBA from LBS, M Litt from Oxford and a PhD from Cambridge.
