A 60% mortgage is a very competitive loan-to-value ratio, so there are a huge range of mortgage products available.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
A 60% LTV mortgage is a mortgage available to those who can produce a deposit of at least 40% of the value of the property they’re buying or remortgaging.
The mortgage rate you can apply for is decided by LTV thresholds, the lower the threshold the cheaper the rate. 60% LTV is the lowest threshold and offers the cheapest rates.
LTV (loan to value) is how big your deposit is relative to the value of the property. The bigger your deposit the lower your loan to value ratio.
Importantly the lower your loan to value ratio, the lower your interest rate will be. This is because the lender will consider you a less risky borrower, as you have in effect already bought outright a percentage of your home.
60% LTV mortgages is typically the lowest threshold offered by lenders, giving the lowest interest rates and cheapest mortgages.
Most people raise the money for a 40% deposit from the sale of their home, or savings accrued over many years. So these mortgages are not typically aimed at first time buyers.
As 60% LTV is the threshold for the lowest rates, if you can almost reach it, it’s well worth scrimping and saving a bit more to get a 40% deposit.
The lower rates and lower repayments you’ll receive with a 60% LTV will save you thousands over the course of your mortgage.
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