Head of Content
Mortgage Advisor & Director
Welcome to our guide to 40% LTV mortgages. Here you will learn what they are, what rates are available, how to access the best deals and more.
What is a 40% LTV mortgage?
A 40% LTV mortgage is a mortgage with a loan-to-value ratio of 40%, which means it would cover 40% of the property’s value or purchase price. The remaining 60% would come from the borrower’s deposit funds or existing equity, if the agreement in question is a remortgage.
If you have this amount of deposit or equity, you will likely be in a strong position to get approved for the mortgage you need and access the best rates available, assuming there are no risk factors present, such as a history of bad credit or complex income.
And even if such risk factors are present, you will stand a much better chance of mortgage approval than somebody with a small deposit or minimal amount of equity.
What are the benefits of a deposit this large?
Mortgage lenders reserve their best deals for borrowers with 50-60% LTV or lower. The main benefits to having this amount of deposit or equity are as follows:
- Lower mortgage rates: The lowest rates on the market kick in at 60% LTV and don’t usually get much more favourable from this point.
- More flexibility: You might be able to access mortgage products with flexible features, such as the option to make uncapped overpayments.
- More product choice: Longer fixed rate mortgages and the option to take out a mortgage on an interest-only basis are sometimes reserved for low LTV borrowers.
- Greater borrowing capacity: Most mortgage lenders cap maximum borrowing at 4.5 times salary, but borrowers with an LTV as low as 40% may be offered a mortgage based on 5 times salary or 6 times salary under the right circumstances.
- Increased chance of approval for higher risk borrowers: With a low loan-to-value ratio, you will stand a better chance of qualifying for a mortgage with bad credit, complex income or a non-standard property type than someone with a low deposit.
In addition to the above advantages, putting down a 60% deposit will mean you pay off your mortgage quicker and will own your home outright sooner.
What rates are available at 40% LTV?
Assuming there are no risk factors for the lender to take on board, you should be able to access the best mortgage rates with an LTV of 40% (or 60% deposit).
|
Mortgage Lender |
Rates at 40% 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 |
Below you will find examples of some of the current rates for borrowers with this LTV. This information was accurate at the time of writing (December 2024) but is subject to change.
Compare 40% LTV mortgage rates and deals
You can compare rates and deals for 40% LTV mortgages from across the market for FREE on Teito and choose the one you want in real time, or have a broker do it for you. Get started below:
Compare 40% LTV mortgage rates for FREE
Buy-to-let mortgages for borrowers with 60% deposit
With 40% LTV, you should have access to the most favourable deals on the market. Rates on buy-to-let mortgages, in general, are around one full percentage point higher than residential agreements, but the best rates kick in at around 60-65% LTV.
Longer-term fixed rate deals (with introductory rates periods of five years plus) tend to have some of the lowest rates, while tracker buy-to-let mortgages have some of the highest.
With 60% deposit, you will also qualify for specialist types of buy-to-let mortgage, such as:
How much your mortgage will cost
To work out how much a 40% LTV mortgage will cost each month and overall, first deduct your 60% deposit from the amount you need to borrow. Next enter this figure into the calculator below along with an interest rate and term length to get quick results.
Why choose Teito for your mortgage needs?
Now that you have done your research, you can compare 40% LTV rates and deals for free on Teito and access support from a whole-of-market broker.
Here are just some of the reasons people choose to source a mortgage through us:
- You can access rates from across the market in seconds, for FREE
- Our brokers can offer bespoke advice on high deposit mortgages
- We are 5-star rated on leading review websites
- It takes minutes to secure your agreement in principle
Ready to compare 40% LTV mortgage rates and take advantage of a free, no-obligation chat with a whole-of-market mortgage broker? Get started here.
FAQs
Yes. Anything from 60% LTV down is considered a good loan-to-value ratio and will guarantee you access to the best mortgage deals, as long as there are no risk factors that could jeopardise your application, such as bad credit or complex income.
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.