100% LTV mortgages

You can get a 100% LTV mortgage with no deposit (or equity) at all – but only if you already have a mortgage with the lender, or if you have a guarantor who can provide security.

What are 100% LTV mortgages?

Put simply, a 100% LTV (loan-to-value) mortgage is a loan for the full value of a property. So, if you bought a £200,000 home with a 100% LTV mortgage, you’d borrow £200,000 from the lender.

Most mortgages are not 100% LTV – usually you would provide some of your own money, either via a deposit or, in the case of remortgaging, equity in your home. A more conventional 90% LTV mortgage, for example, would require you to contribute a deposit of 10%, or £20,000, if you want to buy that £200,000 home.

As always with mortgages, the higher the LTV, the higher the interest rate – and 100% LTV mortgages generally have comparatively high interest rates. Saving up a larger deposit will give you access to mortgages with a lower rate of interest, which significantly reduces your total repayments over the full term.

Can I get a 100% mortgage?

If you want a 100% LTV mortgage, almost every lender will require that you’re an existing customer (i.e. you’re remortgaging), or that you have a guarantor. The guarantor will have to provide enough security to satisfy the lender, which is usually in the form of cash savings or, in fact, the guarantor’s own home.

Without a deposit or a guarantor, most first-time buyers will not be able to get a 100% LTV mortgage – the max they could get would be a 95% LTV mortgage.

Can I get a mortgage with no deposit and no guarantor?

If you don’t have a deposit, don’t own a home, and don’t have a guarantor, then the chances of you purchasing a property are very slim.

Your best bet is to either take steps to help you save up for a deposit, or use a government scheme such as Help to Buy: Shared Ownership. Shared ownership lets you buy a percentage of the property initially – between 25% and 75% – and thus you won’t need such a large deposit. Over time you can buy more of the property until you own the whole thing.

Here’s an example of how it works: for a 25% share in a £300,000 home, you would only need to raise enough of a deposit for £75,000. For a 95% LTV first-time buyer mortgage (where you only require a 5% deposit), you’d need just £3,750.

Only newly built properties qualify for the government’s Help to Buy scheme, so there aren’t that many shared ownership properties on the market – and they get snatched up quickly.

Can you get a mortgage with an LTV over 100%?

Technically, yes, but it’s far from ideal and certainly not desirable. Where you’d need a mortgage with an LTV higher than 100% is if you’re remortgaging, and in negative equity because your house value has dropped to below the mortgage amount.

For example, if you have a mortgage for £200,000 but your home has gone down in value to £180,000, you would need to find a mortgage with an LTV of about 111%.

Alternatively, try to add some of your own savings as a deposit to bring the LTV down to 100%, or ideally 95%.

Edited by: Sarah Guershon

Last updated: 2 January, 2019

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