High Loan to Value Mortgages
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Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
12.12.2025
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
12.12.2025
Getting on the property ladder can be difficult when you don’t have a large deposit, even if you’ve been saving for months. But with the right kind of mortgage, it is possible. At Ascot Mortgages, we help first-time buyers and home movers to make their property dreams a reality with low deposit mortgages – also known as high loan-to-value mortgages.
We’re a highly experienced, trusted family-run mortgage broker, so you can rely on us to find you the very best high loan-to-value mortgage deals. No matter how much of a deposit you have, we can help you secure a mortgage and look forward to owning your first home.
Get in touch to arrange your free initial consultation. Our team will take the time to understand your needs and budget, and we’ll search across the market to find the perfect mortgage for you and your family.
Keep reading to learn more about high loan-to value mortgages and if it’s the right option for you.
What Does Loan-To-Value (LTV) Mean?
Your loan-to-value is the size of your mortgage expressed as a percentage of the property’s price or valuation. This is also known as the loan-to-value ratio.
For example, if you’re buying a £250,000 home with a £12,500 deposit and borrowing £237,500, your LTV is 95%.
LTV matters because lenders use it to judge risk and price your deal accordingly: the higher the LTV, the thinner your equity buffer, and the more cautious a lender tends to be with rates, fees and conditions. That’s why two buyers with identical incomes can be offered very different terms if their LTVs differ.
Your LTV isn’t fixed forever. As you make repayments and as the property’s market value shifts, your equity changes and so does your LTV. On remortgage, that can unlock cheaper pricing if your LTV has fallen into a lower band. In short, lower LTVs usually attract lower rates and wider choice, while higher LTVs typically mean fewer lenders and higher costs.
Why Is LTV Ratio Important?
The reason LTV is important is it indicates to mortgage lenders how much of a risk you are as a customer. The higher your ratio, the more you’re borrowing in relation to the property’s value.
This potentially increases the lender’s loss if you can’t make your repayments and default on the mortgage. There’s also the risk that the property’s value falls, which means that if it needs to be sold as part of a repossession, the sale may not cover the outstanding balance on the mortgage. This would result in something known as ‘negative equity’ – a situation that mortgage lenders understandably want to avoid.
From your point of view as an applicant, LTV is important because it affects the kinds of mortgage deals you can access.
As lenders much prefer applicants with a lower LTV ratio, they offer the best deals to low LTV (i.e. 70%) customers. For everyone else, there may be higher interest rates, higher fees and tougher terms and conditions. This may mean higher monthly repayments and a longer payment term – so you’ll be paying your mortgage off for longer.
What Counts As A ‘High’ LTV In The UK?
In today’s market, anything from 85% up to 95% is generally regarded as high LTV. Many lenders are comfortable at 85% for mainstream borrowers, 90% is available from a smaller pool, and 95% LTV – the classic ‘5% deposit’ purchase – exists but tends to be tightly underwritten with more selective criteria and pricing. By contrast, buyers with 60% LTV or lower are normally offered the keenest rates because they present less risk.
The exact bandings that trigger cheaper pricing vary by lender, but common thresholds include 95%, 90%, 85%, 80%, 75% and 60%. Moving down just one band can improve both the rate and the choice of products you can access.
Can I Still Get A 95% LTV Mortgage With Only A 5% Deposit?
Yes – 95% LTV mortgages are available from selected lenders for eligible borrowers. They’re widely known as ‘5% deposit’ mortgages. The appeal is obvious – you can get onto the ladder sooner without needing to save a large lump sum. The trade-off is cost and scrutiny. Rates at 95% are typically higher than at 90% or 85%, and lenders will look closely at your credit record, income stability, debts and the property itself. Expect tighter maximums on loan size and stricter affordability testing than at lower LTVs.
A note on government support – the UK Mortgage Guarantee Scheme, which encouraged lenders to offer 95% LTV by providing a government guarantee on part of the loan, ended on 30 June 2025 without a confirmed successor at the time. While many lenders continue to offer 95% products commercially, availability and pricing can fluctuate with market conditions. A broker checks which lenders are ‘on’ for your profile today.
Why Do Lenders Charge More For High LTV Mortgages?
It comes down to risk and recovery. With minimal equity, there is less cushion if house prices fall or if a borrower defaults. Lenders therefore price for risk through higher interest rates, potentially higher arrangement fees, and sometimes tighter product terms (for example, restrictions on incentives, cashback or fee-free deals at the very highest LTVs). As your equity grows – either because prices rise or you’ve repaid more of the capital – your LTV falls and you can often refinance onto cheaper deals.
How Do I Calculate My LTV – And What Figure Will The Lender Use?
To calculate your LTV, divide the loan amount by the property value or purchase price (lenders typically use the lower of the two at application), then multiply by 100. For purchases, that’s usually the agreed purchase price, while for remortgages, your lender will rely on a surveyor’s valuation. If the valuation comes back lower than you expected, your LTV rises, sometimes pushing you into a more expensive pricing band. That’s another reason accurate valuation assumptions matter when budgeting.
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Which Types Of Borrower Typically Use High LTV Mortgages?
High LTV lending is common among first-time buyers who have strong incomes and clean credit but modest savings. It can also suit movers who need to retain cash for renovations, families consolidating short-term debts into a structured plan, or anyone whose priority is speed to completion rather than the absolute cheapest rate over the whole term.
The key is to be comfortable with the monthly payments at today’s rate and to build a plan to reduce LTV over time, whether through overpayments (if your product allows), home improvements that add value, or equity growth.
What Do Lenders Look For At 90-95% LTV?
Underwriters focus on three pillars – you, your finances, and the property.
- You
A stable employment history (or demonstrable consistency for the self-employed) and a clean credit profile are crucial. Minor blips may be tolerated by some specialist lenders, but missed payments, recent defaults or payday loans can be problematic at 95% and may push you towards lower LTV or niche products.
- Your finances
Lenders calculate affordability by stress-testing the mortgage against higher theoretical rates to ensure you could still cope if costs rose. They’ll consider basic salary, regular overtime or commission, benefits, and ongoing commitments such as loans, credit cards, childcare and maintenance. Lower existing debt and sensible everyday spending patterns help.
- The property
Some properties are harder to lend on at high LTV, such as new-build flats, unusually constructed homes, or properties above commercial premises. Lenders’ appetite varies; a broker matches you to lenders comfortable with your property type and LTV combination. Mainstream houses with standard construction usually see the widest choice. (Lender criteria pages frequently set out LTV caps by scenario.)
Is A High LTV Right For Me – Or Should I Wait And Save More?
It’s a balance between time in the market and total cost. Buying earlier at 90-95% LTV can make sense if rent is similar to a mortgage payment and you’re confident about job security. The benefit is getting on the ladder sooner and building equity through repayments. The downside is paying a higher rate, and having less resilience to price dips in the short term. For instance, if you can increase your deposit to drop from 95% to 90%, or 90% to 85%, you will usually see noticeably better pricing and more lender options. That’s why some buyers aim to cross key LTV thresholds before applying.
How Do Fixed, Tracker And SVR Choices Compare To High LTV mortgages?
With little spare equity, many borrowers favour fixed-rate products for payment certainty – especially in the first two to five years of home ownership. Fixing can protect your budget from market swings, though initial rates at 95% tend to be higher than at lower LTVs
Tracker deals can look attractive if markets expect rate cuts. However, you must be comfortable with potential monthly payment volatility. Standard Variable Rate (SVR) is rarely optimal beyond any unavoidable gap, as SVRs are usually higher than fixed or tracker rates and can change at a lender’s discretion.
The ‘right’ option depends on your risk tolerance, finances and which products are open to you today.
What Are The Main Risks Of Buying At 90-95% LTV – And How Do I Avoid Them?
The headline risk is negative equity. If property prices fall shortly after purchase, your mortgage could temporarily exceed your home’s value. That doesn’t matter day-to-day if you can comfortably maintain payments and don’t need to sell, but it may limit options when remortgaging or moving. You can reduce risk by choosing a property you intend to keep beyond the short term, setting aside an emergency fund, and, where allowed, making small overpayments to chip away at the balance and improve your LTV band faster. Lower LTVs also give you a wider safety margin if your income changes.
Do High LTV Mortgages Have Extra Fees Or Insurance?
Some lenders cover the higher risk of high LTV loans by charging a higher rate, while others may add product fees that can be paid upfront or added to the loan (adding fees to the loan increases your LTV and the interest you’ll pay overall).
Historically, certain products came with mortgage indemnity or similar arrangements that protected the lender at very high LTVs. Today, it’s more common to see the risk reflected in the rate and criteria rather than separate borrower-paid insurance. Always look at the total cost over the fixed period, not just the headline rate.
Can I Get A High LTV Mortgage If I’m Self-Employed Or Have Bad Credit?
It’s possible, but your documentation and lender selection become even more important.
Self-employed applicants usually need at least one to two years’ accounts or SA302s, with lenders averaging or trending your income.
For credit issues, the details matter, such as how recent the problem was, the amounts involved and whether the issue has been satisfied. The pool of lenders willing to consider 90-95% LTV narrows if adverse credit is recent, whereas specialist lenders may step in at lower LTVs, or with specific conditions. Ascot Mortgages can assess your file, flag any obstacles early and target lenders whose criteria align with your profile today.
What Happens When I Come To Remortgage From A High LTV?
If you purchased at 90-95%, you may find that after your initial fixed or tracker period your LTV has fallen – either because you’ve repaid capital or because the property has risen in value. Dropping into a lower LTV band can unlock markedly cheaper pricing at remortgage. Conversely, if values dip or you’ve made interest-only payments, your LTV might not have improved as expected. In that case, your broker will look at options across the market, including product transfers with your current lender or short ‘stepping-stone’ fixes while you rebuild equity. The principle remains: the lower the LTV, the better the potential rates.
How Do I Improve My Chances Of Approval At 90-95% LTV?
Start with your credit hygiene. Check your credit files with the main UK agencies and correct any errors. Avoid new unsecured borrowing before you apply, keep credit utilisation low, and make all payments on time for several months. Next, stabilise your income evidence – collect payslips, P60s or, if self-employed, your accounts and tax returns. Finally, be realistic about affordability. Lenders will stress-test your payments at a higher notional rate, so leave headroom in your monthly budget. A broker will pre-screen your case against real-world criteria and steer you towards lenders whose underwriting matches your profile and property.
Are There Alternatives If I Can’t Quite Reach A 5-10% deposit?
Depending on your circumstances and location, alternatives may include shared ownership (buying a share and paying rent on the rest), joint borrower, sole proprietor structures (where a family member supports affordability without going on the deeds), or saving a little longer to cross a key LTV band.
Some lenders offer new-build incentives or developer contributions, but be aware these can affect the assessed purchase price and therefore your LTV calculation. The right route is highly case-specific – speak with a broker who can map the pros and cons for you before you commit.
How Can Ascot Mortgages Help With High LTV Applications?
High LTV success often hinges on positioning your case correctly with the right lender. At Ascot, we start by understanding your goals and constraints, then:
- Map your LTV and affordability against current market criteria.
- Shortlist lenders actively lending at your LTV (and comfortable with your property type).
- Optimise product choice – we compare headline rate, fees, cashback, incentives and early repayment charges to calculate true cost over your fixed/introductory period.
- Package your application to highlight strengths and pre-empt underwriter questions, which can speed up decisions.
- Plan ahead for remortgage, with reminders when you approach the end of your deal to re-shop the market as your LTV falls.
Because lender appetite at 90-95% LTV can change quickly, having a whole-of-market view on the day you apply is critical. We do that legwork for you.
To find out more about how we can help you, contact Ascot Mortgages today.
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FAQs
True ‘no-deposit’ mortgages are rare and highly specialist, often with strict eligibility, guarantor or savings-linked requirements. Most mainstream borrowers should plan for at least a 5% deposit and ideally more to widen choice and lower cost.
If your home’s value rises, your LTV decreases, improving your equity. If it falls, your LTV increases, which can limit your options.
A lower LTV ratio usually gives you access to better remortgage rates, while a high LTV may limit choices and increase costs. If you can, try to gradually lower your LTV every time you remortgage. This can be easier if your income and savings have increased, and/or your property value has risen in line with property prices (or you do something to increase its value, such as adding an extension for example).
Eligibility for any kind of mortgage will always depend on a number of different factors. Lenders will usually look at your income, debts, expenses and current financial commitments, credit score, deposit amount and other criteria.
Some lenders reduce maximum LTVs for new-builds or flats, or set extra criteria such as minimum property values, floor-area limits, or caps for second/third-hand sales. Criteria vary considerably, so broker matching is essential to avoid dead-ends.
Your LTV doesn’t change the mechanics of a survey, but at higher LTVs lenders can be more sensitive to down-valuations. If the valuer sets a figure below your agreed purchase price, your LTV rises and your product options may shift. A small extra deposit can sometimes rescue the original deal if that happens.
Rate outlooks move with swap rates, inflation and Bank of England policy. Because this changes, the decision to ‘wait’ versus ‘buy now’ should consider your rent, your deposit growth rate, and product availability for your LTV today. We’ll model scenarios so you can decide with confidence based on live market data.
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Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
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