Compare our best 80% LTV mortgages

Compare mortgages where you can borrow 80% of the LTV of the property you wish to purchase. These are ideal if you have a deposit of 20% or equity of 20% in your current home.

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What is an 80% LTV mortgage?

An 80% loan to value (LTV) mortgage is one that requires you to put down 20% of the property price as a deposit and borrow the remaining 80% of the property’s value from a mortgage provider.

Because you’ll need a larger deposit than say a 90% or 95% LTV mortgage, interest rates tend to be cheaper which means your monthly repayments will be lower too. You’re also less likely to slip into negative equity, where the amount you owe on your mortgage is more than the value of your home.

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How do 80% LTV mortgages work?

If you’re buying your first home and want to apply for an 80% mortgage, you’ll need to save up a deposit worth 20% of the home’s value. For example, if you’re buying a house worth £200,000, the deposit would be £40,000 and you’d need a mortgage for £160,000.

Alternatively, if you’re already on the property ladder but you’re looking to move home or remortgage, the 20% could be funded from the equity in your existing property.

The most common type of 80% LTV mortgage is a repayment mortgage. This means you repay a portion of the capital (the amount borrowed) each month, plus some interest, for an agreed period of time. By the end of the term, you’ll have repaid your mortgage in full and will own your home outright.

In some cases, you may also be able to apply for an 80% LTV interest-only mortgage. This is where you only repay the interest each month, meaning monthly repayments are cheaper, but at the end of the mortgage term you’ll need to repay the full amount borrowed. This type of mortgage is less common as it is deemed a higher risk by lenders – although interest-only mortgages are more common for buy-to-let properties.

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Types of 80% LTV mortgages

When comparing 80% LTV mortgages, you’ll need to consider which type of mortgage is best for you.

Fixed rates

If you choose a fixed-rate mortgage, your mortgage rate and monthly repayments will stay the same for a set term, usually one, three, five or 10 years. The advantage of this is that if interest rates rise, your monthly repayments – and therefore your monthly budget – won’t be affected. The downside is that if interest rates fall, you’ll see no benefit. Fixed-rate deals also often have hefty early repayment charges should you need to get out of your deal early.

Variable rates

With a variable-rate mortgage, the interest rate can change at your lender’s discretion and won’t necessarily follow changes in another financial indicator such as the Bank of England base rate. This means your monthly repayments can fluctuate from month to month, making it harder to budget, so you’ll need to be sure you could afford for your monthly payments to rise before choosing this option.

Tracker mortgage rates

A tracker mortgage will follow movements in another financial indicator, usually the Bank of England base rate. This has the advantage that when the base rate falls, your monthly repayments will also go down. But when the base rate rises, your monthly repayments will become more expensive, so you’ll need to consider whether you could afford for this to happen. Some tracker mortgages have a "floor" which means the rate won’t fall below this level, even if the base rate does.

Discount mortgage rates

With a discount mortgage, the interest rate is pegged at a set amount below your lender’s standard variable rate (SVR), typically for a term of two or five years. So if your mortgage had a 1% discount and your lender’s SVR was 3.5%, you’d pay a rate of 2.5%. This means your mortgage rate will rise and fall by the same amount as your lender’s SVR.

Lending criteria for 80% mortgages

To qualify for an 80% LTV mortgage you’ll need to meet your mortgage provider’s lending criteria. This can vary depending on the provider, but on the whole, you’ll need a good credit rating and be able to show you can afford the monthly repayments.

When assessing your mortgage application, lenders will look at your income, as well as your outgoings. They’ll examine your spending habits, look at what you spend on regular household bills as well as other expenses, and assess how much you owe on credit cards, loans and so on. As long as they are satisfied you won’t be overstretching yourself and can comfortably afford your repayments, you should be accepted for your mortgage. You’ll also need to show evidence of your deposit and proof of ID.

Advantages of 80% mortgages

  • Better mortgage rates compared to someone with a 5% or 10% deposit

  • Smaller monthly repayments

  • A larger selection of mortgage deals to compare

Disadvantages of 80% mortgages

  • Saving up a 20% deposit can take a long time

  • A higher rate of interest compared to someone with a larger deposit

  • More of your savings will be tied up in your home

80% LTV mortgages FAQs

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