Leanne Macardle

Leanne Macardle

Editor
Published: 29/01/2019

At a glance

  • 85% LTV mortgages are available if you have a 15% deposit or 15% equity in your current home.
  • The calculator displays all mortgage types – fixed, variable and tracker.
  • The best fixed rate mortgage deals for 85% LTV mortgages are typically lower than those available for 90% or 95% LTV mortgages.
  • This LTV is a popular option for those looking to remortgage, move to a larger property or those who have seen their current LTV improve from higher levels.

What does LTV mean?

The LTV (or loan-to-value) of a mortgage refers to the amount of loan you’re looking for in relation to the value of the property. It reflects the proportion of the property that’s mortgaged and the part that’s yours (also known as your equity), and is always written as a percentage figure.

So, if you were seeking a mortgage at 85% LTV, you’d have a loan that’s worth 85% of the value of your property. Effectively, this means that 85% of the property will be mortgaged, and you’d own the remaining 15%.

The figure also determines the deposit you’ll need. A mortgage at 85% LTV would mean you’d need to put down a deposit of 15%, whereas if you sought a mortgage at a lower or higher LTV, the deposit requirements would change accordingly.

  • Lower interest rates. Because you're putting up a reasonable amount of money, interest rates for 85% LTV mortgages are lower than those with higher LTV.
  • New build availability. Lenders typically require at least an 85% LTV for new build properties, so you'll be able to consider these properties if you have a 15% deposit or equity available.
  • Potential to cost you more.  Be sure to calculate your LTV. A greater deposit reduces your LTV and as a result can often reduce your initial mortgage rate. LTVs tend to work in multiple of 5 or 10, so if you already have the 20% deposit/equity you need to apply for an 80% LTV mortgage, you may want to consider waiting and increasing your deposit to 25% to access a lower rate mortgage.

Mortgage calculator

Our mortgage calculator helps you to see how much your mortgage might cost you each month.

Our how much can I borrow calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.

Read our How much can I borrow for a mortgage guide to find out more about what can impact your potential sum of borrowing.

Moneyfacts tip Leanne Macardle

If you want to pay your mortgage quicker then consider reducing your mortgage term. Your monthly payments will increase but your total borrowing cost over time will reduce.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

two people in a business meeting

At a glance

  • 85% LTV mortgages are available if you have a 15% deposit or 15% equity in your current home.
  • The calculator displays all mortgage types – fixed, variable and tracker.
  • The best fixed rate mortgage deals for 85% LTV mortgages are typically lower than those available for 90% or 95% LTV mortgages.
  • This LTV is a popular option for those looking to remortgage, move to a larger property or those who have seen their current LTV improve from higher levels.

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