90% LTV Mortgages
In this guide
If you’re looking for a 90% loan to value mortgage for your next home, our team of expert advisers are here to help. We will advise you on the best deals for your specific needs and will support you through every aspect of the application process.
Because we are a fee-free mortgage broker, there will be no cost to you for our services. We are passionate about getting you the very best deal, so get in touch with us today if you would like to learn more.
What is a 90% loan-to-value mortgage?
With a 90% loan-to-value (LTV) mortgage, you can secure a property with a 10% deposit, meaning you only need to save 10% of the property’s value to put down upfront. This type of low deposit mortgage, also known as a 10% mortgage deal, is particularly attractive to those without any significant savings, such as first-time buyers looking to get their feet on the property ladder.
Loan to value mortgages explained
The term loan to value is the ratio between the loan you borrow and the value of the property. Lenders take the LTV into account when deciding how much they are willing to lend you and the rate they’ll charge. It is important to note that the higher the LTV, the more interest you will be charged by the mortgage provider.
10% deposit mortgages on a £200,000 house
Let’s give a real-life example of a 10% deposit. If you wanted to buy a property worth £200,000 for example, you would need to put down a deposit of £20,000 with a 90% loan to value mortgage. The lender would then lend you the remaining £180,000.
Best 90% LTV mortgages
With so much choice out there, it can be hard to find the best mortgage deals. Different mortgage providers have different lending criteria, so there is much to consider before you choose which deal to go for.
Where interest payments are concerned, you might decide that a fixed rate 90% mortgage is best for you. This is because you will have the peace of mind that the interest on your mortgage repayments won’t change over time.
Alternatively, if you believe interest rates are likely to stay low or drop further, you might prefer a variable rate 90% mortgage. This way, you may be able to benefit from cheaper monthly repayments over the duration of your loan term.
Whichever 90 ltv mortgage you choose, it’s important to remember that the lowest rate does not always equate to the cheapest mortgage. This is because the total amount you’ll pay back during the initial period will also include lender fees.
As part of the overall cost, you should always factor in all fees that come with the mortgage product. Your fee-free mortgage broker will be able to explain all the fees that you will need to pay.
You can expect to pay such fees as:
- an arrangement fee,
- booking fee,
- completion fee,
- and other expenses above the initial rate of the loan offered to you.
To save money, it is always worth speaking to a broker. This is because brokers search the entire lending market, including those lenders that you won’t find on your local high street.
Cashback and Incentives
Some products even come with cashback on completion. For example, you may have to pay a £450 arrangement fee upfront for a product that gives you £1000 cashback on completion. Although you will have the fee upfront, you will be £550 better off from this deal.
Some brokers will charge you for their services, but at YesCanDo Money, you can benefit from our expert services for free. If you’re looking for a 90% ltv mortgage, we will consider your available options and will help you choose a deal that is right for you.
If you can’t afford the monthly payment associated with a 10% deposit, there are also 95% mortgages to choose from. Customers without a good credit score will struggle to attain one of these but there are other deals out there that could be considered.
Whatever your circumstances, contact us today for no-fee advice and support.
Compare 90% LTV (10% deposit) mortgage deals
There are over 90 different banks and building societies in the UK offering over 14,000 different mortgage rates. If you were to search the mortgage market in your own time, finding the right mortgage for your personal circumstances could be very challenging.
This is why we recommend our services to you. If your heart is set on getting a 90 ltv mortgage, you can benefit from our expert team. When you have found your potential new property, we will compare all of the different rates in the UK and will advise you on the best lender for you.
It is highly likely that you would have been advertised to by your own bank or building society. They will only sell you their own mortgage products which isn’t always the best mortgage rate or deal that you could achieve. This is why it is recommended to shop ‘whole of market’ with a broker. This means you will have access to nearly every mortgage on the market.
The main issue with looking at mortgage comparison websites is they are sometimes biased. Companies will pay the comparison site to list their product higher in the results. This means you could think you are getting your best available deal when actually you could get better by going whole of market with a broker.
Should I get a 90% LTV mortgage?
A 90% LTV mortgage covers 90% of a property value, so it is certainly worth considering. As it is a low deposit mortgage, it is something a financial adviser might recommend to you if you can’t afford to pay more, such as a first-time buyer.
Provided you have the ability to pay the remaining 10% through the money you have saved up (deposit) or either the equity in your current home this might be the right option for you. You would still need to meet the lender’s eligibility criteria but we can help by finding the lenders who are more likely to lend you the money. 95-90 percent mortgages are known for straighter lending criteria so make sure your credit report is in good shape.
To find out if this is the type of mortgage you can afford, think about your financial position. Consider your earnings in relation to your monthly expenses and calculate how much money you will realistically have leftover. If you think you are able to make the expected monthly repayments, including the other fees required by the lender, then this could be the right type of mortgage for you. If not, it is advisable to look for a house with a lower property value to reduce the monthly payment.
To find out what the repayments on your mortgage might be, use a mortgage calculator or you can speak to a member of our team who will be able to calculate it for you. In some cases, you might prefer to pay a bigger deposit, as this would reduce the repayments on your mortgage.
This type of mortgage may be appropriate if you want to buy your first home with only a 10% deposit. You won’t need to save as much money so you will have the opportunity to get on the property ladder sooner.You might also consider the option if you’re selling your current house and looking to get a new mortgage to buy a new one. If you’re looking to get a remortgage deal on your current property, you might also consider this low deposit mortgage.
You may be eligible to get a 90% LTV mortgage if you own your house and want to move into a new one.
Equity vs DepositThe equity in your current home will need to be at least 10% of the value of the new property. If you needed to top up the equity, you could save for a deposit. So, if the equity in your existing home was worth 8% of the new property’s value, for example, you would need to save up for a deposit to cover the remaining 2%.
Avoid an early repayment chargeTo avoid an early repayment charge you should first consider porting your existing mortgage. Speak to a mortgage advisor who will be able to not only advise you but also be able to do this for you. You do not want to pay an early repayment charge if it can be avoided. Provided the lender was confident you could make each monthly payment and pay their other fees, you should pass their application process. For more advice, check out our guide on moving home mortgages.
A 90% LTV mortgage is considered a lower deposit mortgage and are very attractive to first-time buyers and are usually the most common. This was especially the case when the 95% mortgages disappeared during the 2020 pandemic. As house prices tend to be very expensive, saving up for a deposit isn’t always easy, this is why small deposits are favourable for first time buyers. But as this type of mortgage only requires a small deposit of 10% of the property’s value, buying a first home can be made easier.
The bigger the deposit the lower the monthly paymentIt is always important to consider the rate you will have to pay. Lenders tend to charge higher interest rates on a small deposit with lower mortgage LTVs, so this is worth keeping in mind. If you can save up for a higher deposit on your first mortgage, you will be charged less interest and have lower monthly repayments. Ultimately, it depends on your circumstances. If you can’t afford to make a larger deposit, this type of mortgage could be right for you. While house prices fall along with interest rates, you might also be in a position where you don’t want to wait. In such cases, a 90% loan-to-value mortgage might be ideal for your situation.
What’s a guarantor mortgage?A guarantor mortgage can be worth considering. It is when someone, usually a parent but not always, puts their name on the mortgage as a guarantor. Although this can be worth considering get advice before making a decision. However, consider the overall cost of the property. Sometimes, it is better to wait until you have saved for a larger deposit for the long-term benefit of your finances. We have more advice in our guide on first-time buyer mortgages.
Very few lenders offer 90% LTV mortgages on new builds. This is because most lenders see them as a bigger risk to lend against than existing properties. This may be down to the fact new builds usually drop in value during the immediate years that follow the new-build purchase.At the moment, there are only around 20 lenders that offer this type of product on a new-build house. There are even fewer lenders that offer them for new-build maisonettes and flats. Yorkshire Building Society offers 2 year-fixed and 5-year fixed-rate mortgages with a 90% LTV for new-build homes and flats. Barclays offer 2-year fixed-rate 90% LTV mortgages on new-build homes. An 85% LTV mortgage rate is available for those wanting to buy a new-build flat or maisonette. To find out which other lenders provide this type of loan, benefit from the financial services that we can offer you.
At the moment, very few lenders offer 90% LTV mortgages on a buy-to-let. This isn’t to say it’s impossible, but you may need to pay higher interest rates than normal.
Why lenders don’t usually offer 90% LTV for buy to letsThe reason lenders dismiss a 9o LTV is because of the risk factor. As you will be buying a home that you will be renting out to a third party, there is no guarantee that you will be able to meet the repayment basis set down by the lender. For all they know, your house could be sitting empty for long periods of time or the tenant might hold back on rent payments. As such, you would find it difficult to pay back the original loan that the lender gave you. Buy-to-let mortgages are harder to qualify for at the best of times, even if you do pass the affordability testing required by the lender. They will often insist that you are over 25 and that you own your own home. A lender will often require a deposit of at least 25% and they will want you to have a good credit history. If you are looking for a buy-to-let mortgage, get in touch with our team and we will discuss the most affordable options with you. There is more information in our guide on buy-to-let mortgages.
Remortgaging is always an option if you can find a better deal than the one you are already on. However, in some cases you could be eligible for early repayment charges, so you do need to weigh up your options carefully.It can be challenging to get a 90% LTV remortgaging deal as not many lenders will consider this option. However, it’s not impossible and our team of mortgage brokers can help you. It makes sense to move onto a 90% LTV deal if you have previously taken out a 95% LTV mortgage deal and are about to move onto the lender’s standard variable rate. (Learn why you don’t want to fall onto a standard variable rate!) If you stick with the same lender, you won’t have to pay the early repayment charges. However, your mortgage options may be limited. If you decide to move to a new lender, you will have to pay the early repayment charges if you haven’t yet come to the end of your mortgage term. Learn more by reading our guide on remortgaging.
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Frequently Asked Mortgage Questions
Yes. A number of banks withdrew their 90 LTV mortgages because of COVID-19. But since the government launched the mortgage guarantee scheme, some lenders are now in a position to offer this type of mortgage to their customers again.
Barclays and HSBC are two of the banks that have re-introduced this type of mortgage in recent months. To find out more, compare the current deals being offered through the services of our mortgage brokers.
As with every mortgage, the buyer will need to meet the lender’s eligibility criteria if they want to buy a flat.
However, matters are made more complicated with this type of property, as there are a number of things the lender will take into account. The type of flat, the age of the building, and the location can all affect the lender’s decision. While it can be possible to get a 90% mortgage on a flat, it’s not as easy to do so when compared with buying a house.
If you’re looking to purchase a flat, the mortgage team at YesCanDo Money can explore all available loan-to-value ltv options with you.
Yes. Halifax has released a range of purchase products at 90% loan to value for those moving home. These include products for first-time buyers.
The maximum loan amount to be eligible for a 90% LTV mortgage is £500,000.
However, despite the government’s mortgage guarantee scheme, those looking to buy a new-build property aren’t currently eligible for this type of mortgage. Neither are those looking to get mortgages using the Help to Buy or Shared Ownership schemes. We can help you explore your other loan to value ltv options if you fall into these categories.
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