How do mortgage rates work?

When you take out a mortgage, you're taking out a loan which you'll need to repay. In addition to the loan, you have to pay interest on the amount you borrowed. The amount of interest you pay is determined by your mortgage rate. The higher this is, the more expensive your monthly repayments will be. That's why it's good to try and get a deal with as low an interest rate as possible. However, make sure you also factor in additional fees as sometimes deals with the lowest rates have higher fees, making them more expensive overall. Looking at the Annual Percentage Rate of Change (APRC) of a mortgage can be a helpful way of comparing products based on the combined costs of the rate and fees.

What is a good mortgage interest rate?

A good mortgage interest rate depends on market conditions, along with the size of your deposit and financial circumstances. If you have a large deposit (ideally 40% or more) and excellent credit history, you should be able to get some of the lowest rates available. However, if have a small deposit and your credit rating isn't so strong, you'll likely find you have to pay a more expensive rate. This is because lenders tend to base the rate on how much risk they're taking on by letting you borrow from them. The higher the deposit you put down, the lower the LTV ratio and less risk they're taking on. Similarly, if you have a great credit history, lenders are likely to see you as less of a risk. A mortgage broker can help you find the best rate for your circumstances.

<Mortgages

Uswitch.com>
Mortgages>
70% LTV Mortgages | Our Best 70 Mortgage Rates

70% LTV mortgages

Tell us about yourself and our broker partner Mojo will find the best 70% mortgage rates for you

Find a mortgage

Compare 70% LTV mortgages from 90+ lenders across the whole of the market

What is a 70% LTV mortgage?

A 70% loan-to-value (LTV) mortgage means you put down a deposit worth 30% of the property value. You'll then borrow the remaining 70% from a mortgage lender and repay this over the course of the mortgage term, along with the interest payments.

The LTV is the proportion of the mortgage loan to the value of the property. LTV thresholds decide the mortgage rates you can apply for. A 70% LTV mortgage is at the lower-mid end of LTV values.

How to choose the best 70% LTV mortgage for me

Tell us about yourself

Fill in your details to help us understand your mortgage situation and select the right options for you.

Get recommendations

Get personalised mortgage recommendations that are suited to your individual needs.

Secure your deal

Our broker partner Mojo offers expert mortgage advice and can help secure the best mortgage deal for you.

Find a mortgage

Should I aim for a 30% deposit?

A 30% deposit is worth aiming for if you're able to. 70% LTV mortgages generally offer lower interest rates and monthly repayments than higher LTV mortgages.

And while it's still challenging to save up a deposit worth 30% of a property, particularly if you're a first-time buyer, you might find that it's possible for you. And it's easier than saving up a 40% deposit to access 60% LTV mortgages.

However, given that 30% is still quite a large deposit, it's generally those who already own a property that are able to access these mortgages, as they will have built up some equity in their current home.

The table shows the deposit amount you'd require for a 70% mortgage for different property values. This might help you work out if a 70% mortgage is within your reach.

Property value	Deposit amount (30%)	Mortgage loan amount (70%)
£200,000	£60,000	£140,000
£300,000	£90,000	£210,000
£400,000	£120,000	£280,000
£500,000	£150,000	£350,000

Lending criteria for 70% mortgages

One of the main things you'll need to be eligible for a 70% mortgage is a 30% deposit. And you will likely need to prove that this comes from an approved source.

However, even if you have that, there's not a guarantee that you'll be able to get a 70% mortgage for the property you want. You'll also have to meet the other lending criteria.

Some of the main lending criteria includes income, your spending habits and outgoings, and credit history.

Income

Lenders will use your income to calculate how much you can borrow. You can typically borrow around four-and-a-half time your annual income from a lender.

If you're applying for a mortgage with someone else, the borrowing amount will be based on the total of both your annual incomes.

Expenditure

Lenders will look at your outgoings and spending habits when you apply for a mortgage. This is to check that you will be able to afford the monthly repayments.

It can therefore be a good idea to reduce your outgoings or reviewing your spending habits where possible in the three to six months before applying. Consider whether there are direct debits or standing orders you could cancel, or whether you could reduce your budget for other things.

Credit history

Lenders want to know that you can manage debt reliably which is why they will also take your credit history into account. If you have bad credit due to mistakes in the past, getting accepted for a mortgage may be a bit trickier.

You can check your credit score for free to see where you stand. If your score is low due to credit issues from your past, speak to a mortgage broker who can advise you on lenders who might be willing to consider you.

In addition to the above criteria, you'll also need meet other lender requirements, which may including being between a certain minimum and maximum age, and providing the right documentation.

Advantages of 70% LTV mortgages

A 70% mortgage sits in the low-mid range of LTV ratios, meaning you should be able to access better interest rates than a lot of higher LTV mortgages.
You're less likely to fall into negative equity compared with a higher LTV mortgage.
You'll have to borrow compared to a higher LTV mortgage, which should save you quite a lot in interest payments over the course of the mortgage.

Disadvantages of 70% LTV mortgages

It may be very challenging to save up a 30% deposit, particularly if you're a first-time buyer or don't have much equity built up in your current property.
If you're putting all your savings into a 30% deposit, you might be better keeping some back as an emergency fund and opting for a higher LTV mortgage.
You may be able to access better mortgage deals if you can save up a larger 40% deposit.

If you're able to save up a 30% deposit, then a 70% mortgage may be worthwhile for you. As it's in the low-mid range of LTV ratios, you will usually be able to access better interest rates than with higher LTV products.”

Claire Flynn, Senior Content Editor - Mortgages

Other available LTV mortgages

If you would like to find out more about other LTV mortgages, use the links below to select the ratio you're interested in. Or find out how to compare our best mortgage deals.

Read our mortgage guides

Choose from a selection below or take a look at all of our mortgage guides.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE