60% LTV mortgages
Compare 60% LTV mortgage rates to find the right deal. Learn everything you need to know about buying a house with a 40% deposit.
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Buying a home with a 60% LTV mortgage can mean accessing some of the lowest rates available. By putting down a 40% deposit, you could get competitive rates because you’ll borrow less. Your home may be repossessed if you do not keep up repayments on your mortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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What is a 60% LTV mortgage?
A 60% Loan-to-Value (LTV) mortgage is a loan used to cover 60% of the value of the property you’re buying or remortgaging. It means you will need to provide the remaining 40% as a deposit.
Loan-to-Value (LTV) is the ratio of the amount you want to borrow to the property's value, expressed as a percentage. If you’re a first-time buyer, your deposit is the amount of the property value you’re not borrowing.
For example, if you want to buy a new home worth £300,000 with a 60% LTV mortgage, you’ll borrow £180,000. You’ll then need to put down £120,000 (40% of the property value) of your own money to cover the rest.
As a general rule, the more deposit you can put down, the better mortgage rate you can get. That’s because the risk is reduced for the lender if the property's value falls.
How do 60% LTV mortgages work?
60% mortgages work the same way as other mortgages; the only difference is the deposit you put down will be higher.
You will own more equity from the outset by providing 40% of the property value yourself. This gives the lender more security as it is more likely that they’ll get their money back if you cannot make your repayments.
As a result, mortgage lenders offer their lowest interest rates to homebuyers who can contribute a large deposit.
However, the interest rate offered on a 60% mortgage will still be influenced by your credit score, affordability, employment history, and external market conditions.
Can I get a 60% LTV remortgage?
60% LTV remortgage rates are widely available, and they can be an attractive option if you’re looking for a lower interest rate or to access some of your equity.
Whether or not you’re eligible to remortgage on a 60% deal will depend on several factors, including:
Your credit score: You'll need a good credit score to get a 60% LTV remortgage. Lenders use this score to assess your creditworthiness. The better your score, the more likely you will get approved.
Your personal finances: Lenders will also consider your income, expenditure, employment status, and outstanding debts. They do this to ensure you can comfortably afford the new mortgage repayments.
Your property value: This will determine how much your remortgage will be. Your new loan amount will need to be 60% of the property’s current value; for example, if it is valued at £400,000, you can borrow £240,000 to leave 40% in equity.
Your existing mortgage: When you remortgage, you will need to pay off your existing mortgage, and you could face early repayment charges as part of the process. Make sure you know the terms and conditions of your current mortgage before you start.
It’s always worth discussing your options with a mortgage broker if you want to remortgage. Our expert advisors can help you find a 60% LTV remortgage and guide you through the process.
How to get a 60% LTV mortgage
The process for applying for a 60% LTV mortgage deal is broadly the same as for other mortgage products. Here’s what you’ll need to do:
Use a mortgage calculator to work out what you can afford to borrow. You just need to provide information about your salary, outgoings, and deposit size.
This will give an idea of what you can borrow based on what you earn, so you can use this together with your deposit amount to see if you can get a 60% LTV mortgage deal.
The next step is to get a mortgage in principle, which is usually required before you can start your house search and make offers. It uses your information and a soft credit check to estimate how much you can borrow.
It’s not a legal requirement, but sellers and estate agents are unlikely to take your offer seriously if you don’t have proof that you could borrow the money required to buy the property.
Start searching for your new home. You can use your mortgage in principle to understand what properties you can afford and make an offer when you’re ready.
If you want a low LTV mortgage, like 60%, make sure your deposit covers at least 40% of the purchase price of the properties you’re looking at.
Our expert says…
“If you can afford to, putting down a 40% deposit towards your property purchase is a very savvy move. It means you’ll get favourable rates from your mortgage lender and have a smaller mortgage to pay back.
“It’s important not to use all of your savings towards your mortgage deposit, but hold some back as a safety net. If you want to find the right 60% LTV mortgage, speak to one of our expert brokers today.”
60% LTV mortgage FAQs
If you have enough money saved to cover 40% of your property’s value as a deposit, then there are a lot of good reasons to get a 60% LTV mortgage. However, there are a few downsides, too - let’s look at the pros and cons:
Pros of 60% LTV mortgages
A low LTV ratio usually means you can get better rates
You will have borrowed less compared to a higher LTV mortgage, so you’ll pay less interest overall
You are less likely to fall into negative equity, which is when the market value of your property falls below the outstanding mortgage balance, because of the large deposit you have put down
Cons of 60% LTV mortgages
If you tie all of your savings up in your home, you won’t be able to access them in an emergency or for things like home renovations
It can take a long time to save a 40% deposit, so it may take longer to buy if you want a 60% mortgage
This will depend on each mortgage provider's lending criteria, but in some instances, having a lower LTV and a large deposit can help you get a mortgage with poor credit.
Lenders will see you as a lower risk because their loan covers a smaller amount of the property’s value. Therefore, if you fall behind with your repayments, there is less risk they will be unable to recoup their money if your home is repossessed.
However, providing a 40% deposit is no guarantee that you’ll be accepted. If you have bad credit, try to improve it before applying. Speak to a mortgage broker to discuss your options and to help you find lenders who might lend to you with bad credit.
60% is one of the lowest LTV mortgages you can get, but many lenders do offer mortgage rates for lower LTVs. It is possible to find mortgage deals for 40% LTV; however, these are rare, but 50% LTV mortgages are more common.
Most mortgage types are available at 60% LTV, including:
Repayment: This is the most common type of mortgage and means you pay off both the balance of your home loan and the monthly interest. This means you will have paid off everything you’ve borrowed at the end of your full mortgage term.
Interest-only: With interest-only mortgages, you only pay off the interest you accrue on the amount you borrow. This means you will still owe the balance of your home loan at the end of the term.
Buy-to-let: This type of mortgage is designed specifically for those who buy property to rent out. If you purchase a property for this purpose, you must use a buy-to-let mortgage rather than a standard residential one.
Fixed-rate mortgages: These offer a fixed interest rate for a set period, typically between two and five years. Having a fixed rate means that your monthly repayments will stay the same every month throughout the initial period.
Variable-rate mortgages: There are several types of variable-rate mortgages, including discount mortgages and tracker mortgages. This type of mortgage has a rate that can change and fluctuate, often based on the Bank of England base rate or other market changes.
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Important info & marketing claims
You may have to pay an early repayment charge to your existing lender if you remortgage. Your savings will depend on personal circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.
*The savings figure of £420 is based on Better.co.uk remortgage customers in October 2023. Read more on our marketing claims page.
We can't always guarantee we will be able to help you with your mortgage application depending on your credit history and circumstances.
Average mortgage decision and approval times are based on Better.co.uk's historic data for lenders we submit applications to.
Tracker rates are identified after comparing over 12,000 mortgage products from over 100 mortgage lenders.
As of January 2023, Better.co.uk has access to over 100 lenders. This number is subject to change.
For buy-to-let landlords, there's no guarantee that it will be possible to arrange continuous letting of a property, nor that rental income will be sufficient to meet the cost of the mortgage.