75% LTV Mortgages

There are a range of different mortgage options available to choose from, with various rates and LTVs, including 70%, 75%, 80% and more.

If you have saved up a sizeable deposit, you could be eligible for a 75% LTV mortgage, depending on the amount you have, the property’s value and how well you meet the eligibility criteria for the lender of your choice.

What Is a 75% LTV Mortgage? 

A 75% LTV mortgage is a type of secured loan that lends the borrower 75% the value of the property it’s secured on. For this type of mortgage, borrowers will have to provide a 25% deposit.

There are a number of different benefits to having a 75% LTV mortgage, and having a 25% deposit opens you up to a variety of mortgage options.

While it may take a longer time to save up for a 25% deposit on a property in comparison to other, low-deposit mortgages, providing a larger amount for the deposit means you’ll need to borrow less. Lowering the LTV you require can also lower the interest rates on the mortgage you opt for, making the mortgage more affordable for you.

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What Is Loan-To-Value?

The Loan-to-Value (LTV for short), is expressed as a percentage of the property’s value the loan is secured onto. This percentage is the amount the lenders are willing to provide as a mortgage to the borrower.

For example, a 75% LTV mortgage offers 75% the value of the property the loan is secured onto. There’s a range of different LTVs available to explore, including:

• 70% LTV
• 75% LTV
• 80% LTV
• 85% LTV
• 90% LTV
• 95% LTV

The higher the LTV on a mortgage the greater the risk the lender is taking, as they are lending a larger sum of money leading to a greater loss if the borrower can’t keep up with repayments.

90%-95% LTV mortgages can typically also be known as low-deposit mortgages, borrowers able to borrow such high LTV loans whilst providing smaller deposits (around 5%-10%).

Is a 25% Deposit Good?

Deposits that are 25% or more are generally considered as high deposits, and can help applicants access competitive mortgage rates.

So long as you meet other eligibility criteria, a 25% deposit can open you up to a wide range of different mortgage deals.

There are a range of higher LTV mortgages that require lower deposit amounts (the minimum available with high street lenders being 5% the property’s value). However, these can sometimes come with undesirable interest rates compared to the options available for those who can afford higher deposit amounts.

Will It Be Easier To Get a Mortgage With a Larger Deposit?

Sometimes. While having a larger deposit can open you up to more mortgage rates, this doesn’t necessarily mean it’ll be easier for you to get a mortgage.

In addition to the deposit, mortgage lenders will also have a range of other requirements borrowers will have to meet in order to be eligible. This can include sufficient proof that you will be able to afford the loan and its repayments, your age, and your credit score – all of which is explored in more detail further down the page.

While a bigger deposit won’t necessarily correlate with an increased chance at getting a mortgage, they often open up the borrower’s options to more competitive deals.

How To Get a 75% LTV Mortgage

There are a variety of different ways you can improve your chances of getting this type of LTV, one major one being to build up your credit score. Lenders will often use your credit score when assessing whether or not you’re able to afford the mortgage. If you have a good credit score, this can sometimes help to improve your chances of success.

In addition to this, it’s important to ensure you have the correct deposit for the property purchase. You will need to have a 25% deposit for a 75% LTV mortgage.

Is a 75% LTV Mortgage Good?

A 75% mortgage can be great for those who have enough for a 25% deposit and want to borrow as low an LTV as they can. 75% LTV mortgages can come with lower interest rates than those with higher LTVs, as for example, a 95% LTV mortgage is more of a risk for the lender to loan someone than a 75% LTV mortgage.

However, it’s worth noting that these types of mortgages only work well for those who can comfortably part with a 25% deposit. While less than half the value of the property, 25% of a house’s value can still be a sizeable chunk of money, and one you may not be able to afford.

Therefore, it’s best to only explore this type of LTV when you know you have a 25% deposit available for the property, and can comfortably afford the mortgage that comes with it.

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Am I Eligible for a 75% LTV Mortgage?

As with any type of mortgage, you may have to meet certain eligibility criteria in order to be approved for a 75% LTV mortgage. This can include the following:

• You have a 25% deposit for the property
• You’re within any age requirements the mortgage lender has
• You have sufficient proof of ID
• You have sufficient proof that you can afford the loan, and can pass the lender’s affordability checks
• You have a good credit score/can pass the lender’s credit check

Should I Get a 75% LTV Mortgage?

You should only get a 75% LTV mortgage if you meet the eligibility criteria for this, which includes being able to put down a 25% deposit.

There’s pros and cons to every type of LTV mortgage. Opting for one on the 70%-75% mark can help to potentially lower your interest rates on the mortgage, by paying off more of the property purchase via a larger deposit.

However, those who haven’t been able to save up enough for a 25%-30% deposit but still want to move, a low-deposit mortgage of 90%-95% may be an option to consider. These higher LTVs may come with higher interest, as they are a greater risk for the lender to loan out.

If you can’t realistically afford a 25% deposit but want to lower your LTV on the mortgage as much as possible, there are still a range of other secured loan options available – including 80%, 85% and above LTVs.

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