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What is a 50% mortgage?

A 50% loan to value (LTV) mortgage is one where you borrow 50% of the value of the property you’re buying and the remaining half of the purchase price comes from your deposit. The money you borrow must be repaid to the lender over the mortgage term, alongside interest on the loan.

As you’re putting down such a large deposit, you’ll own more of the property at the start of the mortgage. This means banks and building societies regard 50% LTV mortgages as lower risk and tend to offer more attractive interest rates, so you should get a good deal.

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How do 50% mortgages work?

Most of us need to take out a mortgage when we buy a new home. Every mortgage is made up of two parts - the deposit, which you pay upfront from your own funds, and the loan, which is the cash provided by the lender.

With a 50% mortgage, your deposit is half of the full value of the house. For instance, if you were buying a property worth £240,000, you’d need a deposit of £120,000 for a 50% mortgage. The lender would then offer you the remaining half (also £120,000) as a loan that would need to be paid back over time.

Most mortgages are repayment mortgages, which means that each monthly repayment is made up of a portion of the loan, plus some interest. By the end of the mortgage term, you’ll have repaid your loan in full and you’ll own the property outright. Most mortgages last 25 years, so your repayments and interest will be paid over that period. However, you can get shorter or longer terms, depending on your financial circumstances, age and needs.

The interest rate is set by the lender, and one of the main criteria is the loan-to-value (LTV) ratio of your mortgage. In a nutshell, the more of a deposit you can save and the lower the LTV, the easier it will be to secure the best interest rates. Many lenders offer 95% mortgages where the buyer just needs a 5% deposit, but the interest rates on these deals tend to be very high. If you’re looking at a 50% mortgage, you should be able to get a much cheaper deal.

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Eligibility for a 50% LTV mortgage

To get a 50% mortgage, you’ll need to meet the lender’s mortgage criteria. The first hurdle will be proving you can fund the 50% deposit, but you’ll also need to demonstrate that you can meet other affordability checks.

Most mortgage providers are willing to lend around 4-4.5 x your salary in total. If you have a large deposit but a small income, you may find that you can’t get a mortgage that’s equivalent to the whole deposit amount. 

For instance, say you have £120,000 saved for a deposit. On a 50% mortgage, you’d be looking at properties worth £240,000. But if you earn £20,000 a year, lenders are unlikely to offer you a loan of more than £90,000 (4.5 x your salary). That means you’ll only be able to consider properties worth £210,000. In this case, your LTV would be 42%.

Other factors that lenders use to decide what mortgage you can afford include:

  • Other income, savings and investments

  • Debts 

  • Regular outgoings

  • Child costs (such as school fees and child maintenance)

  • Your credit rating

  • Any past debt problems

Fees for 50% mortgages

Booking fees

This is what you pay to reserve a mortgage rate and it’s also sometimes known as the application fee. On a £200,000 property, you’d usually expect to pay around £100.


Completion fees

This is a fee some lenders charge you for completing your mortgage. If a lender charges this type of fee, it is unlikely it will also charge a booking fee.

Early redemption fees

Many lenders charge a fee if you pay off your mortgage early. There could also be limits on how much you can overpay each month or year fee-free. For example, you might only be able to pay 10% of your mortgage balance as an overpayment each year.

Advantages of 50% LTV mortgages

  • You should be able to get the most attractive interest rates on the market

  • You’ll start off with a decent amount of equity in your home

  • You should have a wide range of providers to choose from

Disadvantages of 50% LTV mortgages

  • You’ll need to save up a big deposit

  • If you put all your savings into your deposit, you won’t have a buffer for emergencies

  • With lots of deals to choose from, you’ll have to do your research carefully

50% LTV mortgages FAQs

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