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Expert advice for those seeking a 60% LTV mortgage

Looking for a mortgage with a loan-to-value of 60%? Our mortgage advisors are here to help you secure the right product for your needs from all the best deals, whatever your circumstances.

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Remortgaging

Remortgaging doesn’t have to be tricky, whether you are looking to remortgage to consolidate debt, buy another property or finance home improvements.

If you are in the market for a 60% LTV mortgage, then you are likely in a better position than most as this will mean that you have a good deposit or decent equity. Whilst not a typical loan to value for first-time buyers, as they won’t often have a deposit that sizeable, 60% mortgages are popular mortgage loans, especially for those with a lot of equity.

We’ll walk you through everything you need to know about 60% LTV mortgages. From what they are and how they work to all the eligibility criteria you need to be accepted. So let’s get started!

What Is a 60% LTV Mortgage?

LTV stands for loan-to-value and refers to the percentage of your loan amount or planned borrowing against the value of your property. With 60% LTV mortgages, you can borrow up to 60% of your home’s value. For example, if you buy a house valued at £200,000 with a deposit or existing home equity of 40% (£80,000), you’ll receive £120,000 as your loan.

In general, a 60% LTV is considered a good ratio meaning if you apply for a 60% LTV deal, you’re a low-risk buyer, according to the lender. The only thing that can impact a lender’s view is if you have a bad credit record.

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What's Home Equity And Why It's Important With 60% LTV Mortgages?

When you take out a mortgage, you are borrowing money from a lender to buy your home. The loan-to-value (LTV) ratio refers to the total amount of money you are borrowing expressed as a percentage of your property’s value.

Equity is the portion of the property that you own outright. It provides financial security and flexibility if you want to convert your equity into cash.

For instance, if your property is valued at £200,000 and you owe £120,000 on your mortgage, you have £80,000 in home equity.

Homeowners in the UK understand that having at least 60% LTV gives them more financial freedom when it comes to selling their homes because they will have more equity in their property.

It also gives borrowers negotiating power and access to more types of mortgages, potentially unlocking attractive interest rates and repayment terms on their loans. Ultimately, this can help borrowers save money on the overall cost of their mortgage over the lifetime of the loan depending on which product they choose.

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How important is LTV when calculating mortgage rates?

Generally speaking, when you apply for a 60% LTV mortgage, lenders will see you as a low-risk borrower. Why? Simply because you’re borrowing less money and thus taking fewer risks. Lenders often reward low-risk customers by providing preferential interest rates. A lower interest rate will mean smaller monthly repayments. Let’s explain more. For example, you want to buy a £200,000 home, and you borrow £160,000 in an 80% LTV mortgage.

Unfortunately, the price of your property goes down for some reason like an economic recession. In that case, you may not be able to follow the repayment schedule, meaning the lender might not get his money back. In such cases, lenders put high interest rates on a loan, to ensure they get their money back. On the other hand, if you’re buying the same £200,000 property but borrowed only £120,000 (60% LTV), in the worst-case scenario, the lender will be able to sell your home and get their money back.

Types Of 60% LTV Mortgages Rates

There are several types of mortgages available in the UK market. The two main types of 60% LTV mortgages are fixed-rate mortgages and variable-rate mortgages.

Fixed Rate Mortgages

This type of mortgage has an interest rate fixed for the deal period, typically one to five years. A two to five-year mortgage term is the most common; however, you can get longer fixed-rate mortgage deals.

Fixed-rate mortgages are suitable for people who want to avoid the risk of variable repayments and stick to a specific budget. This way, they pay the same amount over a specific period despite any interest rate changes.

On the flip side, a fixed rate deal often has higher interest rates than other mortgage types so you can end up paying more over the longer term so the overall cost of the mortgage is higher. That’s because you don’t take the risk of paying less or more on a monthly or weekly basis. Also, if you want to come out of the deal because you are moving home or want to refinance elsewhere, you may find there are early repayment charges. You could also be subject to restrictions if you want to make additional payments.

Variable Rate Mortgages

Variable-rate mortgage deals typically offer better mortgage rates than fixed-rate mortgages. Variable-rate mortgages are affected by changes in market rates; this means your repayments won’t stay the same and might decrease or increase based on your lender’s standard variable rate.

Many borrowers prefer this type of mortgage rate as it saves them money in the long run making the overall cost of the loan cheaper. However, the interest rate is never guaranteed and your lender’s standard variable rate could go up or down depending on market conditions and this can seriously impact your monthly repayments.

Variable rate mortgages are either tracker, discounted, or SVR (standard variable rate).

Discounted Mortgages

Discounted mortgages offer an interest rate discounted against the lender’s SVR. These are ideal if you want more flexibility with how much you can repay but still benefit from the lower rates that discounted SVRs offer. Some lenders offer a discount for an initial period which can be helpful for first-time buyers getting used to mortgage payments or if you are taking on a larger mortgage for a bigger property.

Tracker Mortgages

Tracker mortgages follow an external financial indicator, usually the Bank of England rate. That means the interest rate will increase or decrease depending on the base rate set by the Bank of England.

SVR (Standard Variable Rate)

SVR or standard variable rate varies according to the state of the market. Your lender could transfer your mortgage to their SVR when your initial mortgage agreement expires.

If you’ve been on a fixed rate period, then the SVR will likely result in higher monthly repayments. It’s at this point that many people consider remortgaging to get a better deal.

What Are The Pros Of A 60% LTV Mortgage?

Compared to other mortgage types, 60% LTV mortgages are one of the cheapest in terms of overall cost because of the amount of deposit or equity you bring to the deal. 60% LTV mortgage rates are usually lower because of the good loan-to-value, and on top of the low interest rates, lenders often offer fixed-rate, tracker, and discount deals.

As the average house price in the UK is £302,500 (as of January 2025), mortgages remain one of the best methods to buy a house. That’s because you pay little by little every month.

Low-interest availability – If you get a low-interest deal, you might end up paying lower monthly repayments than the average rent in your area.
Equity building – These mortgages is that they let you build up equity in your home faster than other types of mortgages. Having more equity in your home can give you more options down the line when it comes to refinancing and other loan products.
Flexibility – 60% LTV mortgages give you more flexibility in terms of loan repayments. You can often schedule monthly or bi-weekly payments, depending on your circumstances and availability. This can reduce the time of the mortgage term and the total amount of interest you pay.

What Are the Drawbacks Of A 60% LTV Mortgage?

Before you go ahead and apply for a 60% LTV mortgage, there are some things you should be aware of. If you don’t have enough money for a big deposit then it can be pretty challenging, not to say time-consuming to save a vast sum. If you want to purchase a home more quickly, you might consider higher LTV mortgages. Most lenders have a maximum LTV ratio which, in the case of leading mortgage providers, Nationwide Building Society, and other financial institutions, is 90%.

Frequently Asked Questions

How can we help with a 60% LTV mortgage?

Now that you know a bit about 60%-LTV mortgages in the UK, you might be wondering how When the Bank Says No can help you get a mortgage.

As expert mortgage brokers, we know how daunting applying for a mortgage is, and that’s why we can help you in different ways. There are three key ways we can assist you with this type of loan:

Advice On A Suitable Mortgage Type

With all the different mortgages available, it’s confusing for buyers to work out which one would be best. For that reason, we’ll provide you with helpful advice on what type of 60% LTV mortgages are likely to be available to you based on your circumstances and look at the overall cost for comparison of different mortgage rates.

We’ll take your financial situation and the type of property you want to purchase into account to ensure your application has a high chance of approval. We’ll also guide you on when it’s best to refinance a mortgage at a higher LTV.

Better Mortgage Deals

In addition to doing all the necessary routine paperwork, we can save you money and get you the best 60% LTV mortgage deal for your circumstances, whether that’s tracker rate mortgages, a fixed rate mortgage, or a repayment mortgage on the lender’s standard variable rate.

As a whole-market mortgage broker, we can give you access to a wide range of lenders and mortgage options with competitive interest rates. We compare mortgage deals using the annual percentage rate to establish the overall cost for comparison. We find the best rates and product fees, and we also have access to exclusive deals and discounts that you may not be able to find by shopping around yourself. This means we can often give you access to rates better than those publicly advertised.

Making the Process Easier

Finally, we can help make the entire process easier for you, from start to finish. We’ll take care of all the paperwork and documentation for you, as well as liaise with lenders and other parties on your behalf.

This takes the stress out of applying for a 60% LTV mortgage in the UK, making it much more straightforward for homeowners.

What criteria are taken into account with a 60% LTV mortgage?

In addition to the deposit, there are some other criteria that you need to meet to be eligible for 60% LTV loans. Lenders usually prefer applicants with steady incomes and an ideal debt-to-income ratio. In most cases, you can borrow around 4 to 4.5 times your annual salary. That’s why having a stable income is critical for a higher chance of approval.

Not all lenders apply the same criteria for accepting an application. However, it’s common for lenders to take into account your current salary and any other sources of income that you have (investments or other forms of profit).

Lenders also consider your work status. Whether you’re self-employed or new to a job, lenders want to know more about your job to ensure you have a stable position and salary to cover your monthly repayments.

Having enough money in the bank or a stable job isn’t enough on its own to make you eligible for a 60% LTV mortgage. That’s why lenders will look at your spending habits to ensure you can cover monthly payments. They’ll need to check your outgoings including the use of credit cards and how much you spend on bills, groceries, entertainment, etc. People who are trying to get their foot on the first rung of the property ladder tend to be subject to more scrutiny because they don’t have a prior mortgage history.

Lenders will also check your credit score to see your history of managing debts like personal loans and credit cards. With a good credit score, it’s far more likely that you’ll qualify for a 60%-LTV mortgage. That’s because your good credit history will give lenders more confidence that you’ll be able to make the regular mortgage repayments required on the loan.

Can I get a 60% LTV mortgage deal as a first-time buyer?

Yes, you can, as long as you have enough money for a 40% deposit, or sufficient equity, and you meet the lender’s financial requirements.

What’s a suitable LTV ratio in the UK?

In general, it’s better to aim for mortgages under 80% LTV. However, there are some mortgages with loan to value of up to 90%. High mortgages seem to be better if you want to buy your property quickly, but the mortgage rate will be much higher than if you’d taken out a 60% or even a 50% LTV mortgage.

How long will it typically take to process my mortgage application?

The processing time for your application will depend on the lenders you are working with. However, typically, it should take about four to six weeks from when you submit your application until the funds are available.

How Easy Is It To Get a 60% LTV Mortgage?

With equity or a deposit of 40% on the table, getting accepted for a 60% LTV mortgage is often quite straightforward. It’s also worth noting that most people who raise money for a 40% deposit have already owned properties before. On the other hand, finding this size of deposit is more challenging for first-time buyers. Over the past decade, the prices of houses in the UK have dramatically increased. That means many people now have a proportionally smaller mortgage on their properties. If your equity has increased, you may be eligible for a 60% LTV mortgage with lower interest rates.

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