Whether you’re buying your first place, remortgaging or moving house, a 90% loan-to-value (LTV) mortgage is a pretty good place to start.

To get a 90% LTV mortgage, you need a 10% deposit. This should get you lower interest rates than if you only had a 5% deposit (95% LTV) – but the trade-off is that you need to save up a larger amount of cash.

What is a 90% LTV mortgage?

LTV (loan-to-value) refers to the ratio between how much loan you need to buy a property vs. how much it is worth.

With a 90% LTV mortgage, you borrow 90% of the cost of the home you want to buy and put down the remaining 10% as your deposit, which will most likely either be from cash savings or home equity.

For example, if you’re buying a £400,000 property, you’d need a deposit (or equity) of £40,000 to hit an LTV of 90%. The remaining £360,000 would be lent to you by the mortgage provider.

Now read: What is LTV or loan to value?

Can I buy my first home with a 90% LTV mortgage?

Yes, you can. If you’re a first-time buyer, and you’ve managed to save up a 10% deposit, then… congratulations! That’s no mean feat with ever-increasing living costs and the state of the property market, even with the recent slight price dip.

As a first-time buyer with a 90% LTV, you’ll have access to mortgage products with more competitive interest rates (that could save you thousands of pounds in interest payments) than 95 and 100% mortgages.

As a general rule, the bigger the deposit, the better the rates. Lower interest rates mean a larger proportion of your repayments will go towards paying off the capital you owe rather than being swallowed up by the interest charges.

Read our full guide on how long it takes to save a deposit

Can I remortgage or move house with a 90% LTV mortgage?

If you’re moving house or remortgaging, and you have positive home equity of at least 10%, then you can get a 90% LTV mortgage.

For example, if you owe £400,000 to your mortgage provider, but your home has gone up in value to £450,000, then you have positive equity of £50,000. You can use that equity to get a new mortgage, rather than having to save up a deposit. Or, if you do have savings, you can add those to the equation and reduce your LTV even further.

If you can reduce your LTV to 85%, 80%, or even lower, then you could be offered even more desirable interest rates by mortgage lenders.

You can find out how much you owe on your mortgage by checking your most recent statement – or ask your lender directly. To find out how much your home is worth now, get a rough estimate online or ask an estate agent for a valuation.

Now find out how to increase the value of your home

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