Heron Financial arranged a £122,000 buy-to-let mortgage at 55% LTV for joint clients in Sheffield, a self-employed business owner and director and a business manager in employment, purchasing a £220,000 three-bedroom detached house as a rental investment. The £98,000 deposit was funded by equity released from the clients’ main home, with their existing residence valued at £381,000 providing the foundation for the new investment. Heron Financial placed the case with Coventry Intermediaries / Godiva Mortgages, and the buy-to-let mortgage completed in May 2026.
The clients
The clients were an established couple in Sheffield, owners of their main home worth £381,000 with substantial equity built up over time. One applicant runs their own business as a self-employed director; the other works in a management role through standard PAYE employment. They came to Heron Financial wanting to use some of the equity in their main home as the deposit on a buy-to-let purchase, a three-bedroom detached house at £220,000 that they planned to rent out as their first (or next) investment property.
The structure is increasingly common among homeowners stepping into property investment: rather than waiting years to save a separate BTL deposit, use the equity already sitting in the main home, raised through a remortgage or further advance, to fund the deposit on the rental property. The case had two moving parts, the equity release on the residential home, and the BTL purchase on the new property, and both needed coordinating.
The case at a glance
- Clients: Joint applicants, one self-employed (business owner / director), one employed (business manager)
- Nationality: British
- Occupations: Self-employed business owner / director + business manager
- Property type: Three-bedroom detached house (buy-to-let purchase)
- Location: Sheffield
- Purchase price: £220,000
- Deposit: £98,000 from equity released from the main home (44.55% of purchase price)
- Existing main home valuation: £381,000 (provides the equity foundation)
- BTL loan amount: £122,000
- LTV against BTL purchase price: 55.45%
- Lender: Coventry Intermediaries / Godiva Mortgages
- Transaction type: Buy-to-let purchase, with deposit funded by equity release from main home
- Completion: May 2026
The challenge
Two-part transactions, equity release on one property to fund a purchase on another, need careful coordination. The case worked cleanly because several things lined up:
Equity release from the main home. The clients raised the £98,000 deposit by remortgaging or taking a further advance on their main residence. This is a standard approach to funding a BTL deposit, but lenders ask about the purpose of any capital raise on a residential mortgage. Confirming the purpose (BTL deposit for a new investment property) is acceptable to the residential lender before submission is important.
BTL underwriting on the new property. Buy-to-let lending isn’t sized on personal income in the way residential mortgages are. It’s sized on the rental income the BTL property will produce, stress-tested against an interest coverage ratio (ICR). At 55% LTV, the case sat well inside comfortable BTL territory, with strong rental cover headroom and access to competitive pricing.
Mixed employed and self-employed income. Both applicants are on the BTL application. The self-employed business owner’s income is assessed differently from the employed business manager’s. On a BTL application, the income element is typically about meeting a minimum income threshold (often £25,000 for the lead applicant) rather than driving the loan size. Both incomes contributing to that threshold made the affordability picture straightforward.
Property type. A three-bedroom detached house is a strong BTL profile, family rental demand, no leasehold complications, and a property type lenders treat cleanly.
How Heron Financial approached the recommendation
The Heron adviser focused on The Heron adviser focused on coordinating the two pieces and matching the BTL purchase to the right lender.
Equity release on the main home. Heron Financial structured the raise on the residential home with the deposit purpose clearly disclosed, so the residential lender’s underwriting ran cleanly.
BTL lender mapping. With a £98,000 deposit available, the BTL case had access to a wide lender market at 55% LTV. Heron Financial narrowed the panel to lenders comfortable with mixed employed / self-employed joint applicants on a BTL purchase, with workable criteria on rental coverage and minimum income.
Lender choice. Coventry Intermediaries / Godiva Mortgages was the right home for the BTL purchase. Godiva is Coventry Building Society’s dedicated BTL lending arm, with workable criteria for joint applicants combining employed and self-employed income, clean rental stress tests at 55% LTV, and competitive pricing in the deep-LTV BTL tier.
Rental coverage. At 55% LTV, the rental income on the detached house comfortably cleared the lender’s ICR requirement, with headroom that simplified the underwriting.
The outcome
The buy-to-let mortgage completed in May 2026. The clients now have:
A £122,000 BTL mortgage at 55% LTV against the purchase price
A three-bedroom detached rental property added to their property holdings
Equity from the main home productively deployed into investment
A clean, low-LTV BTL position with strong rental coverage
What this means for buyers in a similar position
If you own your main home and have significant equity built up over time, using some of that equity to step into property investment is a well-established route. The structure has two parts that need to work together: raising the deposit on the main home (through remortgage or further advance), and the BTL purchase on the new property. Both lenders ask about the purpose of the capital raise, and both want the rental income on the new property to comfortably cover the BTL mortgage at the chosen LTV. A broker who can coordinate both pieces in parallel, rather than treating them as separate transactions, keeps the timeline tight and the documentation clean.
FAQs
Can you use equity from your home as a buy-to-let deposit?
Yes. Raising the deposit for a BTL purchase by remortgaging (or taking a further advance against) your main home is a well-established route to property investment. The capital raise on the residential mortgage is subject to your existing lender’s affordability and capital raise rules. The BTL purchase is then a separate transaction on the new property.
How does a buy-to-let mortgage work?
A buy-to-let (BTL) mortgage is a loan secured against a property you rent out rather than live in. The loan size is sized on the rental income the property will produce, stress-tested against an interest coverage ratio (ICR), typically 125% to 145%, at a stressed interest rate. Most BTL mortgages require a minimum 20–25% deposit, with the best rates at 25% deposit or more.
Can a self-employed business owner get a buy-to-let mortgage?
Yes. Self-employed applicants, sole traders, partners, limited company directors, can access BTL mortgages with most lenders, subject to minimum income evidence (typically two years of accounts or SA302s) and the rental stress test on the property. On joint applications, mixed employed and self-employed income is straightforward.
What is a minimum income requirement on a buy-to-let mortgage?
Many BTL lenders require the applicant (or at least one applicant on a joint case) to earn a minimum personal income, typically £20,000 or £25,000. This is separate from the rental income that sizes the loan. The minimum income requirement helps the lender confirm the applicant can cover the mortgage during void periods or rental shortfalls.
Is 55% LTV a good band for a buy-to-let mortgage?
Yes, it’s one of the most comfortable BTL bands. Lower LTVs (60% and below) unlock the sharpest BTL pricing, with strong rental coverage headroom and a wide lender panel. Higher LTVs (75% and above) are also available but with stricter rental stress tests, narrower lender choice and weaker pricing.
