How many 90% mortgages are available?
This is a difficult one to answer as new mortgages are brought out and old ones withdrawn on a regular basis, but what we can say is that there are usually many products available several hundred, in fact. This means you've got plenty of choice if you're looking for a new deal, so compare 90% LTV mortgages to see the kind of options available.
Who offers 90% mortgages on new builds?
This is another tricky one to answer as the market is constantly changing, but as a general rule, securing a 90% LTV mortgage may be slightly more difficult on a new build than an older home. As it stands, most mortgage providers won't lend at more than 85% LTV for a new build house, and this could even fall to 75% for a new build flat, so you may need to do a bit of digging to secure a deal to suit.
This is where heading to a broker or specialist financial adviser can come in, as they'll be able to help you narrow down the options, and if you're struggling, you may want to consider the Help to Buy equity loan scheme. This can allow you to secure a lower LTV mortgage with the help of a Government loan, and you'd still only put down a 10% or even 5% deposit. Find out more about this option here.
What are the risks of this kind of mortgage?
The risks of 10% deposit mortgages are similar to those for any other kind of loan, with the key one being the risk of default. Lenders view higher LTV lending as riskier given the size of the loan and the resulting repayments, which is why it's so important to make certain that you can afford the repayments – both now and should rates rise in the future – and why lenders are so strict with their criteria.
Then there's the risk of negative equity. If the value of your home plummeted by more than 10%, you could end up owning more in a mortgage than your home's worth, potentially leaving you a mortgage prisoner as it'd be incredibly difficult to remortgage. This is why making overpayments is often recommended if you can afford to, giving you the chance to reduce interest payments and even remortgage to a lower LTV.
Why are rates higher than at lower LTVs?
Even the cheapest 90% LTV mortgage rate will typically be higher than that for lower LTVs, for the same reason as above – the risk associated with this form of lending. Providers are giving you a hefty amount of money in relation to the value of the property, which puts their loan at greater risk should you default, and as a result they're asking you to pay more for the privilege.
Can I get buy-to-let mortgages at 90% LTV?
As a rule, no, at least not if you're a first-time landlord. Lenders rarely offer 90% LTV buy-to-let mortgages, and if they do, you'll typically need to have a good track record with that lender, which may include a portfolio of mortgaged (and profitable) properties with them already.
At the very least, you'll need to already have a mortgaged property – first-time buyers will be highly unlikely to secure a buy-to-let 90% LTV deal – but even then it could be tricky. This means anyone searching for a 90% LTV buy-to-let deal will have to go down a more bespoke route; which means speak to your lender, a broker or financial adviser, who will be able to give you some tailored answers.
How can I find the best 10% deposit mortgages?
Compare the options! This is the only way to ensure you find the best 90% LTV mortgages, so head to our mortgage calculator to get started.