How to compare 75% LTV mortgages
You can use this comparison to find one that is suitable for your financial circumstances. Use it to check the interest rates and fees of each deal to find the best 75% LTV mortgage.
What is a 75% mortgage?
Every mortgage has a loan to value (LTV), which is the percentage of the property's value that the mortgage covers.
If your mortgage covers 75%, you need to pay the remaining 25% with a deposit, or with equity in your home if you own it already.
For example, if you want to buy a house worth £200,000 and have a 25% deposit of £50,000, you would need a 75% LTV mortgage for £150,000.
25% deposit mortgages are usually cheaper than deals that require a smaller deposit. This is because lenders consider mortgages with a smaller LTV to be less risky for them.
What types can you get?
Before you compare mortgages, decide what kind of mortgage you want:
Fixed or variable
You can get mortgages with several different types of interest rate:
Fixed rates are guaranteed to stay the same for a definite period
Variable rates can change whenever the lender decides
Tracker rates change whenever an indicator like the Bank of England base rate changes
Discount rates stay an agreed percentage below the SVR* for a fixed period
Capped rates come with a maximum interest rate they cannot go above
*The lender's standard variable rate
The guarantees offered by capped and fixed rates can give you security that your monthly payments will not increase above a certain amount.
Variable, tracker and discount rates often start with lower interest rates, but these could rise at any time, meaning what you pay each month would increase.
How to decide what type of interest rate suits your finances
Long or short term
You can choose how long your mortgage lasts when you take it out.
A longer term means your monthly payments are lower, and lenders are more likely to offer you a mortgage that is more affordable.
But choosing a shorter term means you pay it off quicker and pay less interest overall.
How to decide between a long or short term 75% mortgage
Repayment or interest only
Repayment mortgages: Your monthly payments go towards clearing the balance and paying the interest charged. By the end of your mortgage term, you owe no more money and own your home outright.
Interest only mortgages: Your monthly payments only go towards the interest charged. At the end of your mortgage term, you have to pay back your full mortgage balance.
Here is how to decide between a 75% interest only or repayment mortgage
You can also get buy to let remortgages if you need a new deal on your existing investment property.
How to find the best 75 LTV mortgages
The best mortgage for you depends not only on your own circumstances, such as your credit score and your deposit, but also any fees and interest attached to a mortgage.
The price you pay will also be affected by wider LTV mortgage rates, which are currently at historic lows.
It's also always worth comparing mortgage providers and deals, as the market is competitive and you don't need to take the first offer you're given.
