Compare our best 85% LTV mortgages

Compare all 85% LTV mortgages from lenders across the market. Also known as 15%-deposit mortgages, these home loans let you borrow up to 85% of the property's purchase price. Ideal if you have 15% equity in your home or a 15% deposit.

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What is an 85% mortgage?

An 85% LTV mortgage is one where your deposit is worth 15% of the total value of a property and a mortgage provider loans you the remaining 85%. 

For instance, on a home worth £240,000, you would need a deposit of £36,000 to get an 85% LTV mortgage. Your mortgage loan from the bank or building society would be £204,000. This would then need to be repaid to your lender over time, with interest added to the loan.

Most lenders offer loans of up to 95% LTV, meaning buyers can get on the property ladder with deposits worth as little as 5%. However, the smaller your deposit and the higher your LTV, the more expensive your mortgage will be.

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How do 85% mortgages work?

To secure an 85% mortgage, you’ll first need to save a deposit. This could be funded from savings, investments, gifts from family, equity in your current home and so on.

Next, you’ll need to find a lender who is willing to offer you the remaining 85% as a loan. This will mean meeting affordability criteria and demonstrating your earnings are high enough to make the repayments.

Once your mortgage has been agreed, upon and you’ve purchased your new home, you’ll have to repay the amount borrowed in monthly instalments, with interest added on top. Lenders use your loan-to-value (LTV) ratio as a factor when deciding what interest rate to offer you. 

Typically, the lower the LTV, the better the interest rate. That means someone with an 85% LTV mortgage will usually have a better deal than someone with a 95% LTV but will pay more interest than if they’d gone for a 75% LTV mortgage. That’s why it makes sense to have as big a deposit as possible when buying a home.

How can I find the right 85% mortgage for me?

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What types of mortgage rates are available for 85% mortgages?

Fixed

This is when the interest rate you pay is guaranteed for a set period – typically two, three, five or 10 years. Your monthly repayments stay exactly the same for the length of the deal. You might pay more at the outset, but you get security in return and know what your repayments will cost you. That means you’re not at the mercy of external factors like interest rate rises.

Variable

Variable-rate mortgages go up and down each month. What decides this will depend on the kind of variable mortgage you have. A tracker mortgage usually follows an external indicator, most commonly the Bank of England base rate. A lender’s standard variable rate (SVR) is the mortgage you get put on when a deal ends. The provider can raise or lower it depending on their own set of criteria. It’s usually the most expensive option. A discount mortgage will be pegged a certain percentage below the SVR, offering you a better rate for the term of your deal.

Lending criteria for 85% mortgages

Mortgage providers set their own affordability criteria when deciding what to lend you. This means that they’ll examine your specific circumstances to see whether you qualify for their 85% LTV deals. Common considerations include:

  • Your salary

  • Other income, such as buy-to-let property or investments

  • Savings

  • Regularly monthly outgoings

  • Your spending

  • Debts, such as loans and credit cards

  • Your credit rating

  • Any past debt issues

  • The type of property

  • The total value of the house

Advantages of 85% mortgages

  • Lower interest rates than 90% or 95% LTV mortgages

  • It’s still a relatively small deposit to save

  • A wide range of providers to consider

Disadvantages of 85% mortgages

  • Less favourable rates compared to lower LTV mortgages

  • Need to save a higher deposit 

  • Higher monthly repayments compared to lower LTV mortgages

85% mortgage FAQs

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