65% LTV mortgages

Having a lower LTV and a large deposit can help you get a mortgage if you have poor credit. However, whether or not you can get a mortgage will depend on the lender's specific lending criteria. 

Lenders will see you as a lower risk if you have a big deposit and more equity in your property. This is because their loan will cover a smaller amount of the property’s value, so if you fall behind on your repayments, there is less risk they will be unable to recoup their money. 

However, providing a 35% deposit is no guarantee that you’ll be accepted. Always try to improve your credit before starting a mortgage application to reduce the risk of rejection. Talk to a broker who can discuss your options and help you find a mortgage suited to your situation.

Getting a 65% mortgage as a first-time buyer is possible, and a 35% deposit could mean getting better interest rates and mortgage terms. 

As a first-time buyer, your deposit will have to come from your own funds, and saving up 35% of the value of the property you want to buy can be difficult.

Remember that having a large deposit doesn’t guarantee your eligibility. Lenders will look at things like your credit history, affordability and employment status when deciding to give you a loan.

Having as low an LTV as possible is an attractive option if you can afford it, but it might not be the right option for everybody. 

Here are a few reasons you might want to get a low LTV mortgage:

• Lower interest rates and lower monthly payments

• Paying less interest over the term of the mortgage

• Less chance of falling into negative equity

• Option to pay off your mortgage faster

• Can make you more attractive to lenders

On the other hand, building up 35% could delay you getting onto the property ladder. If you’re currently renting, buying sooner with a higher LTV mortgage could work out cheaper in the long run.

A high deposit also means you might risk committing all your savings and tying them up in your property. That means you won’t be able to access them in an emergency or for things like home renovations.

You can get most mortgage types at 65% LTV, including:

• Repayment: This is the most common mortgage type where you pay off a small amount of the balance and the interest each month. You will have cleared your loan and own your property outright at the end of your term.

• Interest-only: With interest-only mortgages, you only pay off the interest each month and don’t clear any of the balance. This means you’ll need to pay back the balance in one lump sum at the end of the term.

• Fixed-rate mortgages: These fix the rate of interest you pay for a set period, typically between 2 and 5 years. Having a rate that doesn’t change means your monthly payments will stay the same, even during times of fluctuation in the mortgage market. 

• Variable-rate mortgages: This type of mortgage has a rate that can fluctuate, often based on the Bank of England base rate or other market changes. There are several types of variable-rate mortgages, including discount mortgages and tracker mortgages.