Discover The Best 75% LTV Mortgages
Getting a 75% loan-to-value (LTV) mortgage opens the door to some of the best interest rates and deals available. With this kind of mortgage, you’re looking at a more comprehensive selection of low rates, which means your monthly payments could be significantly less. Our guide dives into the details of 75% LTV mortgages, explaining the benefits, eligibility criteria, and rates you might see. And if you’ve got questions after going through our guide, our mortgage team is here to help without charge.
What is a 75% LTV Ratio Mortgage?
With a 75% LTV mortgage, you can borrow up to 75% of the property value.
The lender will pay 75% of the property, and you must deposit the other 25%. If you remortgage or port your mortgage, you will need at least 25% equity in your property.
Many banks and building societies offer mortgages of this size, and if you qualify, you will benefit from deals with more favourable interest rates and reduced mortgage repayments.
An example of a 75% Mortgage with a 25% Deposit
Now that you know that to qualify for a 75% loan-to-value mortgage, you will need a 25% deposit, let’s give a real-world example.
Imagine you are looking to buy a property with a property value of £250,000. In that case, you’d put down 25% as the deposit, meaning £62,500. Your mortgage lender then covers 75% of the property price, or in this case £187,500.
The Best 75% LTV Mortgage Rates
Check out the best mortgage interest rates below for a 75% loan-to-value (LTV) ratio. This interest rates table is live, however rates are subject to change, so don’t wait too long to contact our free mortgage advisors to lock in a rate.
The mortgage examples given are for buying a property valued at £250,000 with a mortgage of £187,500 over a 25-year period, equating to a 75% Loan to Value (LTV) ratio. It’s important to remember that actual rates and terms may vary based on personal financial conditions and fluctuations in the market. The numbers provided should be seen as indicative and for guidance purposes only; for advice that specifically suits your situation, it’s best to speak with a professional.
What Are the Benefits of a 75% LTV Mortgage?
When you choose a 75% loan-to-value (LTV) mortgage, you will be able to get low-interest rates and incentives, which will reduce the overall cost over the term. This level of LTV is associated with some of the best deals in the mortgage market. The lenders’ risk of being reduced at this level is why rates are lower. Let’s look at some of the primary benefits that come with securing a mortgage with a 75% LTV:
1. Get Better Interest Rates
Borrowers tend to get much lower fixed or tracker rates on a 75% LTV mortgage. Since mortgage providers perceive these loans as far less risky than higher LTV ones, borrowing is cheaper across the term of your mortgage, which could save you a lot.
2. Make Lower Monthly Repayments
The lower rates of interest also mean one thing: your monthly repayments will be smaller. This means that your mortgage will be more affordable month-to-month, and your cash flow will improve, too, giving you money to allocate elsewhere.
3. Choose From More Mortgage Products
Those with a 75% LTV can access a broader range of mortgages overall. Because clients who pose less risk are much more appealing to lenders, they’re far more likely to offer top products with better terms and lower overall cost.
4. Increased Approval Rates
A big deposit reduces lenders’ liability if you default on your loan or fall into arrears. So, by bringing plenty to the table – in this case, at least 25% – you’ll significantly boost your chances of getting approved for a mortgage loan.
5. Equity and Investment Benefits
Since you start with a higher-than-average LTV of 75%, you hold an immediate 25% equity stake in your property. Not only does this act like insurance if house prices drop suddenly, but it also puts you in a good position should any future property investments or decisions arise.
By going for a 75% LTV mortgage product when buying or refinancing your home, you’re setting yourself up nicely for some of the best terms on the market. Whether you want to save or benefit in other ways, this level of LTV can make a massive difference to the overall cost of the mortgage.
Mortgage Types with a 75% LTV mortgage
Being a whole of market mortgage broker, we access a broad range of providers, enabling us to find various mortgage types suited to different needs. Our service involves comparing these options to advise you on the best types of mortgage and lenders for your financial situation.
In identifying the ideal mortgage type, we consider:
- A range of mortgage products and their fit with your financial goals.
- Benefits and drawbacks of each type, including fixed-rate for consistent payments and variable rates for flexibility.
Our aim is to match you with a mortgage type that aligns with your unique circumstances.
Variable Rate Mortgage
If you choose a lender’s standard variable-rate mortgage, you might benefit from a low-interest rate at the beginning of your mortgage. However, depending on the lender’s decision and economic factors, that interest rate may rise or fall during the initial deal period.
There are three types of variable-rate mortgages:
- Tracker Rate Mortgages: Tracker mortgages have a mortgage rate directly linked to either the Bank of England’s base rate or another benchmark interest rate. This means that your monthly payments can increase or decrease with changes in base rates. This provides transparency but also variability in your monthly costs.
- Discounted Variable Rate Mortgages: These provide a discount off the lender’s standard variable rate (SVR) for a set time, usually 2-5 years. The amount you pay can increase or decrease depending on changes to SVR. This makes it less predictable but potentially cheaper than fixed-rate deals in the short term.
- Your Lender’s Standard Variable Rate (SVR): The default mortgage rate will revert to once an introductory deal and initial period has ended, such as a fixed-rate or discounted period. The lender sets the SVR, which can be changed at their discretion. It often reflects overall movements in interest rates but is usually higher than other rates available on the market.
Fixed Rate Mortgages
Higher interest rates often accompany fixed-rate mortgages because they are locked in for a specific duration, so there won’t be any sudden hikes in interest payments. People love a fixed-rate deal because the repayments are consistent, meaning the exact amount will leave your bank account every month, which can help you plan your budget effectively during the initial period.
At the end of the agreed fixed rate initial period, you should switch to a new mortgage deal to gain access to more affordable LTV mortgage rates. If you don’t switch, the total cost of your mortgage will increase as you fall onto the lender’s standard variable rate (SVR), which is higher. You can remortgage earlier, but your current lender could impose early repayment charges.
Can I Afford a 75% LTV Mortgage?
Am I eligible for a 75% LTV mortgage? That’s a question you’ll need to ask yourself if you’re considering this type of property loan. Calculating your eligibility isn’t easy, but it is possible. You have to consider your current financial health and prospects when considering the affordability of this option. Here are some steps you can take:
Figure Out How Much Deposit You Can Afford to Pay
First, you must figure out how much money you can offer as a deposit on the home. Your savings must be at least 25% of the home’s value if you hope to qualify for a 75% LTV mortgage.
That said, don’t dip into other funds or emergency accounts to gather enough money for the deposit. Instead, consider saving harder or exploring ways to increase your deposit amount.
It never hurts to ask family members for help, either; they could choose to gift you some extra cash towards your goal. If all else fails, investigate savings schemes that benefit those looking to buy their first homes.
Discover how much your can afford with our Mortgage Affordability Calculator.
How Much Will Your Monthly Payments Be?
Once you’ve determined how much deposit you can afford, you’ll need to determine whether your monthly payments will fit your budget.
To do this, use our mortgage repayment calculator to input different interest rates and mortgage terms. This will give you an estimation of your payments.
You should also ensure that these monthly repayments align with your monthly spending (after necessary expenses). If they don’t fit within the remainder of your budget, paying off the mortgage would put too much strain on your finances and leave no room for fun—or even emergencies.
Accounting For Additional Costs
A mortgage isn’t the only expense associated with buying a home. You’ll also need to pay for:
- Stamp duty
- Valuation fees
- Solicitor’s fees (if you can’t find a free one)
It would be best to remember that the property won’t magically get maintained on its own. It will be your responsibility, and you’ll need to pay for upkeep and repairs out of pocket as they arise.
Are You Sturdy Enough Financially?
If your monthly repayments are manageable and the other costs don’t seem too intimidating, it’s time to assess whether you’re ready for this financial commitment.
Ask yourself:
- Is my job secure?
- Is my income stable?
- How likely am I to receive raises or bonuses in the future?
- Will I have to take a pay cut at any point to move up the ladder?
- Will my career trajectory remain steady over the next few years?
How To Get The Best 75% LTV Mortgage Deals
Don’t settle for the first mortgage deal you see. Compare mortgages by opting for one of the following options.
1) Reach Out to Lenders Directly
With over 90 lenders in the UK, contacting all of them would be a waste of time. Trying all at once might confuse you even more if you don’t know which ones are right. But this is an option if you have all the time in the world.
2) Check Mortgage Comparison Websites
These are convenient because you can get most of the necessary information with just a few clicks. However, some comparison websites prefer certain providers, so they might not show all the options available to you.
3) Go For Fee Free Mortgage Brokers
We think this is by far the best way to find and secure the right mortgage. Brokers offer a stress free way to find the best mortgage for your situation. We’ve got a team here at YesCanDo Money who can compare all the mortgage deals on your behalf. Since we’re unbiased and know what makes a good deal, we promise to find the best one for your situation. And we will never charge you a fee for doing so as we are a fee free mortgage broker.
75% LTV Mortgages for First-Time Buyers
For first-time buyer mortgages, finding the strength to gather a 25% deposit for a 75% LTV mortgage is often the most challenging part of their journey towards homeownership. But going through that pain and struggle opens up significant financial benefits. Here’s a closer look at what you get for your efforts:
- Better interest rates: Lowering your LTV ratio can unlock much lower interest rates, which means you don’t have to pay as much overall.
- Lower monthly payments: Thanks to lower interest rates, your monthly payment will shrink, lightening your load.
- Instant equity: Slipping in that 25% deposit means you instantly own a good chunk of your house – not only does this stop any market woes from devaluing your home, but it also gives you more borrowing power in the future.
- Easier mortgage approval: The more money you put down upfront, the less risky lenders see you. This makes them far more likely to approve your mortgage application.
- Access better deals: The most attractive mortgage deals are snapped up by people with low LTV ratios. So, if you’ve got that, thanks to a hefty deposit, congratulations! All those lovely terms are within reach.
- No extra fees: Higher LTV mortgages carry big lending charges. But with a 75% LTV mortgage, you’ll skip right past all that unneeded excess cost.
Remortgaging onto a 75% LTV Deal
Switching to a 75% loan-to-value (LTV) mortgage when you remortgage will have advantages when you remortgage and have enough home equity. But it’s an even more brilliant move closer to the end of your initial mortgage term when you are moved onto a more expensive standard variable rate (SVR). Here’s why:
Lower rates: Typically, jumping to a 75% LTV mortgage deal means lower rates of interest than SVRs or other higher-LTV mortgages, which means cheaper monthly payments.
Predictable payments: A fixed-rate remortgage at this level will keep your monthly repayments consistent, making budgeting easier.
Cash to play with: This type of remortgage will likely give you access to your home’s built-up equity as cash in hand. Whether for renovations, debt consolidation or something else entirely, this could be the funding you’re looking for.
Better deals: Banks and brokers love low-risk customers; having a low LTV ratio shows them that’s what you are. Expect better terms and conditions on offers if you’re borrowing at 75%.
Avoid fees: Higher-LTV mortgages often have additional fees that can add up to what you already owe. Remortgaging at this level will allow you to bypass those costs and reduce your total borrowing costs.
If switching to a 75% LTV mortgage has caught your attention, ensure the time is right. Ideally, you want to make the jump as soon as possible after completing your initial period so as not to experience any slow creep towards an SVR. However, take note of any early repayment charges if you’re still within that initial period; long-term savings might not outweigh immediate expenses in this case. Assessing how much equity you’ve got going on in your property, being very thorough in comparing deals and overall cost, analysing where exactly you stand financially should all be part of the process before making any decisions.
75% LTV Buy-To-Let Mortgage
When it comes to buy-to-let mortgages, things can get confusing. Lenders usually offer a maximum loan-to-value (LTV) of 85%. But if you’re an investor looking for less risk and better loan terms, a 75% LTV mortgage might be the move. This choice doesn’t just meet lenders’ requirements but also opens up many benefits for savvy investors. Here are some of the most important ones:
- Lower Interest Rates: When you opt for a lower LTV ratio, your rate of interest will tumble. This significantly reduces borrowing costs compared to higher LTV mortgages.
- Increased Cash Flow: Better cash flow management is crucial in the buy-to-let sector. With lower monthly repayments, you’ll have more money to maintain profitability.
- Greater Loan Accessibility: A 75% LTV tells lenders you’re a low-risk borrower, making getting approved much easier than loans with higher LTVs.
- Wider Selection of Mortgage Products: Now that you’ve caught lenders’ attention, they’ll start offering more mortgage products—some with much better terms and conditions than others.
- Improved Investment Leverage: By still allowing investors to leverage their investment at this level while also having them put down a substantial deposit upfront, 75% LTV lets investors potentially earn returns on properties they otherwise couldn’t afford.
- Risk Mitigation: A smaller debt burden is good news when market volatility strikes or rental incomes become wobbly (as they tend to do).
Opting for a 75% LTV mortgage in the buy-to-let market takes careful planning and high upfront costs. However, the reduced borrowing costs, improved cash flow prospects, and a wider array of product offerings make up for any investment pain points. Whether you’re stepping into the buy-to-let arena or expanding your portfolio further, this type of mortgage should be something you heavily consider.
Read this article to learn more and to discover the best 75% loan-to-value Buy to let mortgage rates
Explore your 80% loan to value mortgage options >
Frequently Asked Questions
How Do I Get a 75% LTV?
To get a 75% loan-to-value ratio, you’ll need to deposit 25%. This shows lenders you’re in a solid financial position and you will likely have a wider range of products available to you.
Is 75% a Good LTV?
Yep! It’s solid. Lenders and banks consider a 75% loan-to-value (LTV) ratio good, and it typically qualifies for lower rates of interest and better mortgage terms.
What LTV Gives Best Mortgage Rates?
Lower LTVs are generally given the best rates, often below 80%. So yes, 75% falls under that umbrella and will typically receive some of the cheapest rates of interest.
Can You Get 80% LTV?
Absolutely. An 80% LTV requires a deposit of just one-fifth. It’s also standard and available from most lenders, though it is slightly riskier than opting for a 75%.
Is 70% LTV Good?
Yes! You’re looking at excellent territory here. With this level of home equity, you’ll usually secure some of the lowest rates of interest and the lowest overall cost on the market.
Is 78% LTV Good?
A loan-to-value ratio of 78% is relatively good, offering decent rates of interest. Homeowners with this level of equity could have paid down their mortgage loan amount slightly or seen the value appreciate.
