What is the maximum LTV available for a BTL revolving credit facility?

What is the maximum LTV available for a BTL revolving credit facility?

For UK property investors, access to flexible finance is essential. A Buy-to-Let (BTL) revolving credit facility operates like a secured property overdraft, allowing landlords to draw funds, repay them, and draw them again without a new application. Crucially, this is a secured facility—specifically, it is secured as a second charge against a residential buy-to-let property. It is not an unsecured business loan, a business credit card, or generic business revolving credit.

Because this facility sits behind your existing first-charge mortgage, borrowing limits depend on Loan-to-Value (LTV) calculations. As an FCA-authorised broker (Ref: 681423), Promise Money helps landlords find the right secured options. Contact us on 01902 585020 or visit our landlord revolving credit hub.

How LTV works for a second-charge revolving credit facility

Because a BTL revolving credit facility is secured as a second charge, lenders look at the Combined Loan-to-Value (CLTV). This includes your outstanding first mortgage and the proposed revolving credit limit.

For example, if you own a buy-to-let property worth £400,000 with a £200,000 first mortgage (50% LTV), a lender approving a revolving facility of £100,000 brings total secured debt to £300,000. Your combined LTV is 75% (£300,000 / £400,000).

This second-charge structure is highly beneficial because it allows you to access equity without disturbing a competitive, low interest rate on your primary mortgage.

What is the maximum LTV available for a BTL revolving credit facility?

In the UK specialist lending market, the maximum combined LTV for a secured BTL revolving credit facility is typically 70% to 75%. Under certain conditions, some niche lenders may offer up to 80% LTV.

The exact maximum LTV available depends on several key underwriting factors:

• Property type and location: Standard residential buy-to-lets in high-demand areas generally qualify for higher LTV limits.
• Rental coverage: Lenders assess whether rental income comfortably covers both the first mortgage payments and potential interest on the revolving facility.
• Your credit profile: Your credit history helps determine the maximum LTV and interest rates. Get your free credit search here. It’s free for 30 days and costs £14.99 per month thereafter if you don’t cancel it. You can cancel at anytime. (Ad)

Why choose revolving credit over bridging finance or remortgaging?

Landlords typically release equity via remortgaging or bridging loans. However, a BTL revolving credit facility often provides a more flexible alternative.

Remortgaging is slow and forces you to pay interest on the entire lump sum immediately. A revolving credit facility, by contrast, only charges interest on the amount you actually draw down. Undrawn funds do not incur interest charges.

Bridging finance is a short-term option but is designed for single-use transactions. Most bridging loans roll up interest, meaning monthly payments are not typical. Bridging loans are categorised as either open bridging loans (no fixed repayment date) or closed bridging loans (requiring a strict exit strategy, like a property sale). While useful, bridging finance lacks the reusable flexibility of a revolving facility, where you can typically draw down funds in 24 to 48 hours once arranged.

Real landlord scenarios: How to use a revolving facility

The flexibility of a secured revolving credit facility makes it ideal for several common landlord investment strategies:

• Auction purchases: Bids at auction require a fast 10% deposit and completion within 28 days. A revolving facility allows you to draw down funds within 48 hours to secure the purchase.
• Refurbishments and EPC upgrades: You can draw down funds to cover insulation, boilers, or windows, then repay them once the property is re-let.
• Covering void periods: If a property sits empty, you can draw from your revolving facility to cover first-charge mortgage commitments.

Important risks of secured second-charge borrowing

While highly flexible, this is a secured second charge, meaning your property may be at risk if repayments are not made. Failure to meet repayments could result in legal action, repossession of the property, increased interest rates, and additional charges. Always ensure you have a clear plan for how drawn funds will be repaid. For guidance on responsible borrowing, you can read the MoneyHelper website, an independent advice service funded by the UK government.

People also asked

How is interest charged on a BTL revolving credit facility?

Interest is only charged on the funds you have actually drawn down, rather than the entire facility limit, making it highly cost-effective.

Can I secure a revolving credit facility if I have bad credit?

Yes, because the facility is secured against a residential buy-to-let property. However, severe credit issues may reduce the maximum LTV available.

How quickly can I draw funds once the facility is established?

Once the second-charge facility is set up, you can typically draw down funds within 24 to 48 hours of making a request.

Is a BTL revolving credit facility an unsecured loan?

No, this is strictly a secured facility. It is secured as a second charge against your residential buy-to-let property, sitting behind your existing first mortgage.

What properties are eligible for this type of revolving credit?

Eligible properties must be residential buy-to-let investments. Lenders typically do not offer these second-charge revolving facilities on primary residential homes.

How Promise Money can help

Navigating the second-charge lending market can be complex. Promise Money is an FCA-authorised broker (Ref: 681423), not a direct lender. We work with a wide panel of specialist lenders to help UK landlords find the right revolving credit facilities for their specific needs.

Whether you need to upgrade your portfolio’s EPC ratings or secure auction properties, our team is here to guide you. Contact us today on 01902 585020 or explore our landlord revolving credit hub to learn more about maximum LTV options.