80% LTV mortgages

Learn everything you need to know about 80% LTV mortgages. Compare deals to find the right option for buying a house with a 20% deposit.

Compare our best 80% LTV mortgage deals

By choosing an 80% LTV mortgage and putting down a 20% deposit, you can access more mortgage options and cheaper interest rates.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Your loan to value is 80.00%

What is an 80% loan to value (LTV) mortgage?

An 80% loan-to-value (LTV) mortgage is a home loan that covers 80% of the value of the property you’re buying. That means you need to contribute the remaining 20% as a deposit. 

For example, if you are buying a property with a purchase price of £250,000, with an 80% LTV mortgage, you’ll borrow £200,000. You will then need to provide the remaining £50,000 (20%) yourself as a deposit. 

By putting down a relatively large deposit of 20%, you can access lower rates compared to a mortgage with a higher LTV, like a 90% LTV mortgage.

How do 80% LTV mortgages work?

80% mortgages work by covering all but 20% of the purchase price of the property you’re buying. That means in order to access an 80% LTV mortgage rate, you’ll need to have saved 20% of the value of the house you want to buy if you’re a first-time buyer.

If you already have a house and a mortgage and are looking to remortgage, the 20% can be covered by the equity you currently hold in your property.

Once you’ve taken out your 80% mortgage, you’ll repay the balance together with the interest over the mortgage term. How long your mortgage lasts depends on a few factors, like your age, but it will typically last 25 or 30 years. 

By having a larger deposit, mortgage lenders may offer slightly lower interest rates. This is because the chances of you slipping into negative equity (where the amount you owe on your mortgage is more than your property’s value) are much lower than with a 90 or 95% mortgage.

Can I get an 80% LTV buy-to-let mortgage?

Getting a buy-to-let mortgage at 80% is possible, but they are relatively rare. Only in recent years have buy-to-let mortgages been available above 75% LTV.

Unlike residential mortgages, where properties can be purchased with small deposits of 10 or even 5%, buy-to-let mortgages require a higher personal contribution. 

Here are some factors that will determine whether you can get an 80% buy-to-let mortgage:

  • Rental income: Lenders use your rental income to determine your ability to repay the mortgage. That’s why most require your rental income to be at least 125% of your monthly mortgage payment.

  • Affordability: Buy-to-let lenders will also look at your incomings and outgoings to make sure you can afford your repayments even if you don’t have rental income coming in.

  • Credit score: As with a residential mortgage, you will need a good credit score to be accepted for a buy-to-let mortgage.

  • Your age: Most buy-to-let mortgage providers will only lend to you if you are over 21. Some will now lend to 18-year-olds, but this is much less common.

  • Property type: Many lenders have restrictions on the type of property they will lend for. Properties of non-standard construction are usually not accepted, and some don’t lend on HMOs (Houses of Multiple Occupancy).

All lenders have their own specific acceptance criteria, so it’s important to read these carefully before you apply.

Is 80% a good LTV?

Getting a mortgage at 80% is a sensible option if you can save up a deposit worth 20% of the purchase price.

80% mortgages come with lower interest rates compared to higher LTV deals. On the flip side, it is possible to access even better rates if you can provide a higher deposit and get a 75% mortgage or even a 60% LTV mortgage

Here are the pros and cons of 80% LTV mortgages:

The benefits of an 80% mortgage

  • Better rates: You’ll get access to better rates than with higher LTV mortgage deals, like 90% LTV

  • Less interest: You’ll pay less interest over the term of your mortgage than if you put down a deposit smaller than 20%

  • More choice: 80% LTV rates are offered by most lenders, so you will have more deals to compare compared to other LTV products

The drawbacks of an 80% mortgage

  • Higher rates: You will pay a higher rate of interest than with a lower LTV mortgage, like 75% or 60% LTV

  • Time to save: It will take longer to build up a 20% deposit than a lower amount like 10% or 5%, which could delay your house move

Money tied up: By putting down a 20% deposit, more of your savings will be tied up in your home and not accessible in an emergency

An 80% is a good LTV if that is the lowest you can afford. While putting down as big a deposit as possible is a good idea, always remember to hold some of your savings back for emergencies. 

You will also need to make sure you have enough money left to cover some of the costs associated with buying a house. You’ll need to pay solicitors fees, surveys and moving costs. You will also need to pay stamp duty, although you may get stamp duty relief if you’re a first-time buyer. 

These costs can mount up, some make sure you know how much you need to cover them, and you hold this back from your deposit.

What types of 80% mortgages can I get?

Most mortgage types are available at 80% LTV. Here’s a breakdown of some of the different mortgage options you can choose from:

Fixed-rate mortgages offer an interest rate that stays the same for a specified period, usually between two and five years, but longer terms are available. A fixed rate means your monthly repayments won’t change throughout the initial term.

The standard variable rate (SVR) is the rate you’re automatically moved to at the end of your initial deal term. Your lender sets it, and it can change at any time, usually in response to the Bank of England base rate. The rate is generally higher than other deals.

Tracker mortgages: This type of variable rate mortgage follows the market, usually through the Bank of England base rate. That means the rate can change, so your payments could go up or down.

The interest rate of these mortgages is set at an amount below the lender’s SVR, for example, 1% or 2%. So, if your lender’s SVR is 5% and the discount rate is 1%, your interest rate will be 4%. Your rate will, therefore, change whenever your lender adjusts their SVR.

Fixed-rate mortgages

Standard variable-rate mortgages

Tracker mortgages

Discount mortgages

Fixed-rate mortgages offer an interest rate that stays the same for a specified period, usually between two and five years, but longer terms are available. A fixed rate means your monthly repayments won’t change throughout the initial term.

Repayment or interest-only mortgage?

Another thing to consider when deciding on the type of mortgage you want is whether you want to repay the loan on a repayment or interest-only basis.

Repayment is the most common option and means you pay off part of the balance of your mortgage and interest each month. Your repayments are calculated so that you’ll have paid off everything you’ve borrowed at the end of your mortgage term.

With interest-only, you only pay off the interest you accrue each month on the amount you borrow. This means the balance will not go down, and you will need to repay what you have borrowed in full at the end of the mortgage term.

Interest-only monthly payments will be lower each month compared to the repayment option. However, you will be faced with repaying all the capital you borrowed in one lump sum.

Our expert says...

“Getting a 20% deposit mortgage is a great way to get on the property ladder while accessing better interest rates. An 80% LTV mortgage is a good middle ground between putting down a large deposit to get the cheapest deals and being able to buy quickly by saving a much smaller deposit.

“If you’re confident an 80% mortgage is the right option, speak to one of our expert brokers. They can talk you through all your options so you can find the right deal.”

- Jon Bone \ CeMAP-qualified mortgage adviser

80% LTV mortgage FAQs

The first thing you need to have to be eligible for an 80% LTV mortgage is a deposit worth 20% of the property's purchase price.

If you have that, you then need to meet the lender’s eligibility criteria. Each lender will have their own criteria you will need to meet, but generally, they’ll look at:

  • Your credit report: Every lender performs a hard credit check on your credit report during the application process. You will usually need a good credit score to be accepted, although some lenders will lend to you even if you have a poor credit score.  

  • Your affordability: To work out if you can afford the mortgage repayments, the lender will look at your incomings and outgoings. They also use this information to determine how much they will lend you.

  • Your employment status: Lenders want to ensure you have a steady income by looking at your employment status and history. Things like the stability of your role and length of current employment may be considered.

Loan-to-Value (LTV) represents the ratio of the mortgage loan amount to the purchase price of the property you’re buying. It is expressed as a percentage and is used to assess the risk associated with a mortgage and set interest rates. 

For example, if you were buying a house with a purchase price of £300,000 and you have a deposit of £30,000 to contribute, you would need a mortgage worth £270,000. In this instance, the LTV would be 90%, with the deposit representing the remaining 10%.

This depends on your financial situation and goals. There are advantages to having a low LTV, including:

  • Cheaper deals

  • Paying less interest overall

  • Less chance of falling into negative equity

  • Potential to pay off your mortgage faster

However, having a higher LTV mortgage means putting down a smaller deposit, which will be quicker to save for. It also means you can hold some money back in savings that you need fast access to in an emergency.

You can, provided you have enough equity in your property to increase the LTV to 80%. You can also increase the LTV when you remortgage if the value of your home has increased sufficiently.  

Alternatively, if you’re looking to remortgage and your previous mortgage was at a higher LTV, like 90%, you could get an 80% mortgage. Generally, the LTV of your mortgage will go down as you pay off the balance, so you may get a cheaper deal when you remortgage.

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