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Mortgage Advisor & Director
Borrowers with a high deposit are sought after and often incentivised by mortgage lenders, but how much deposit qualifies as ‘large’, and how do you get the best deal based on your loan-to-value ratio? Read on to find out.
What is classed as a ‘large’ mortgage deposit?
A ‘large’ mortgage deposit would be anywhere between 35% and 40% of the property’s purchase or higher. This would give you a loan-to-value (LTV) ratio of at least 60-65%.
The lower your LTV, the better the interest rate you are likely to qualify for, but lenders’ best rates tend to kick in at 60-65% LTV and don’t get any lower than at this ratio.
With a high deposit of 35-40% or more, you can qualify for a number of incentives at certain mortgage lenders. In addition to lower rates, you could also benefit from:
- Flexible features, such as less restrictions on overpayments
- A wider range of mortgage types to choose from, including longer fixed rates
- More repayment type options, such as interest-only mortgages
- Borrowing against higher income multiples (5-6 times salary)
- Getting approved with bad credit
- Getting approved based on 1 year’s accounts if you’re self-employed
Not all lenders offer these incentives. The best way to get your ideal mortgage based on the amount of deposit you have is to speak to a mortgage broker - our advisors have access to the entire market and can round up all of the best deals starting at 60-65% LTV.
What interest rate to expect from 60-65% LTV
Mortgage lenders tend to reserve their most favourable interest rates for borrowers with 35-40% deposit. At the time of writing, interest rates of under 4% are available for residential mortgage borrowers with loan-to-value ratios of 60-65% or lower.
Generally speaking, 5-year fixed-rate mortgages have some of the lowest interest rates right now, while tracker mortgages have some of the highest (but can offer more flexibility).
The table below shows representative examples of the rates currently available for borrowers with high deposits. Please note that these are subject to change.
|
Mortgage Lender |
Rates at 60-65% LTV |
Products Available |
|
4.09% to 6.14% |
2, 3, 5 and 10-year fixes & 2-year tracker mortgages |
|
|
4.17% to 5.68% |
2 and 5-year fixes & 2-year tracker mortgages |
|
|
4.04% to 6.24% |
2, 3, 5 and 10-year fixes & 2-year tracker mortgages |
|
|
4.19% to 5.39% |
2 and 5-year fixes & 2-year tracker mortgages |
These rates were source in December 2024 but can change at any time
How to compare high deposit mortgages
You can compare rates for large deposit mortgages for free on Teito and choose the one you want in real time. When you source a mortgage with us, our brokers will be on hand to offer advice and help you get the best deal for a borrower with 60-65% LTV or lower. Get started below:
Compare large deposit mortgage rates for FREE
Can you get a mortgage with a big deposit but low income?
It depends exactly how low your income is. You will still need to satisfy the lender’s affordability checks to qualify for the mortgage you need, regardless of your deposit size.
To get a rough idea of whether you will qualify, multiply your annual income by 4.5. If the resulting figure is equal to or exceeds the amount you need to borrow with your deposit factored in, you can be reasonably confident that you can afford a mortgage of this amount.
While a deposit of 35-40% or more can help you qualify for the best rates and means you need to borrow less, affordability is assessed separately based on your income and outgoings.
What about if you have no job?
If you have no job, it can be tricky to get approved for a mortgage, even if you have a big deposit to put down. You will need at least some income to pass the affordability checks.
This income does not need to come from a job in the traditional sense, though. If your large deposit means you only need a relatively small mortgage, there is a possibility you might earn enough through other sources, such as benefits, investments or pension income.
Apply the same income multiple of 4.5 times annual salary to your total income from every legal source to get a rough idea of whether you will meet the affordability criteria.
Getting a bad credit mortgage with 60-65% LTV or lower
One of the best ways to boost your chances of getting a mortgage with bad credit is to put down extra deposit, where possible, so with a minimum of 60-65% LTV you are in a much stronger position than someone who has credit issues and only a small amount of deposit.
A deposit amount of at least 35-40% is substantial enough to help you qualify for a mortgage with most types of credit problems, even fairly severe issues such as CCJs, potentially. But if the issue is very recent or of higher severity (such as a bankruptcy), approval isn’t a given.
Luckily there are mortgage brokers who specialise in bad credit and they often have access to bespoke deals based on deposit amount and other factors.
Large deposit buy-to-let mortgages
Although deposit requirements are typically higher in the buy-to-let mortgage market, a deposit amount of up to 40% of the property’s purchase price would still be considered substantial, and put you in good stead to qualify for the best rates available.
At the time of writing, it is possible to get a buy-to-let mortgage with a rate of around 4% with this deposit amount, although this is where rates start. Fixed-rate mortgages with an introductory rates period of 5 years tend to have some of the lowest rates, while tracker mortgages can reach upwards of 6% or higher.
With at least 35-40% deposit, you will also meet the LTV requirements for specialist types of buy-to-let mortgages, including:
Work out the repayments on a low LTV mortgage
To work out your mortgage repayments, first deduct your deposit from the property’s purchase price and enter the resulting figure into our calculator below along with an interest rate, term length and repayment type to be served with some quick results.
Why choose Teito for your mortgage needs?
You can compare rates for mortgages starting at 60-65% LTV for free on Teito, access support from a broker who specialises in high deposit lending, and choose the deal you want online.
Here are just some of the reasons our customers source their mortgage through us:
- You can access exclusive rates and deals in seconds
- We can offer bespoke advice on high deposit mortgages
- We are 5-star rated on leading review websites
- You can source an agreement in principle in minutes
Ready to compare rates and deals and take advantage of a free, no-obligation chat with a broker who specialises in high deposit mortgages? Get started here.
FAQs
Yes, it can be for several reasons. If you have a large deposit to put down, you will have access to a much wider range of accessible lenders and mortgage products. Extra deposit can also offset the risk involved in complex mortgages, such as agreements where the borrower has bad credit or is self-employed with minimal proof of their income.
Having a large deposit also means you will need to borrow less, but you will still need to pass the affordability checks for the amount on the mortgage, regardless of your LTV.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.