Is a 90% LTV mortgage right for you? How to find the best deals – July 2021

6 min Read Published: 02 Jul 2021

best 90% LTV mortgagesWhat is a 90% LTV mortgage?

A 90% LTV mortgage means borrowing 90% of the value of a property, with the remaining 10% coming from a deposit or equity built up in your existing home. 90% LTV mortgages are popular among first-time buyers as it is easier to save a 10% deposit than the amount needed for a lower LTV alternative. However, higher LTV mortgages attract higher mortgage rates, which makes them a more expensive option.

The way to work out which LTV mortgage you are likely to need is to calculate the amount of deposit you have available and the value of the property you would like to buy.

If you divide the mortgage amount by the value of the property, you will find the LTV. So, for a property worth £250,000, with a deposit of £25,000, the calculation is:

£225,000 / £250,000 = 0.9 (multiply by 100 = 90% LTV)

To get a better idea of the amount of deposit you are likely to require for a house purchase, read our article "How much deposit do first-time buyers really need?"

How can I find the best 90% LTV mortgage for me?

We have listed the best deals currently available for both first-time buyers and those remortgaging in the tables below. These products act as an illustration of the interest rates you can expect to pay, the monthly payment and the fees different lenders charge. It also indicates each lender's standard variable rate (SVR), which you will be moved on to at the end of the initial deal.

To find the best deals for your specific circumstances, we have a useful mortgage comparison tool, powered by Habito. By filling out the property value, the amount you have for a deposit and the type of product you are looking for, it will instantly show you the best mortgages for you.

Another option is to contact online mortgage broker Habito* directly as their advisers will be able to guide you through the products that suit your needs and advise you on which deals you are likely to be accepted for. They can also provide you with access to deals from lenders who only accept applications through an intermediary.

Best 90% LTV mortgages for first-time buyers

Based on a property valued at £250,000 with a £25,000 deposit and a mortgage term of 25 years. Assuming a repayment mortgage with the fees paid upfront.

Cheapest 2-year fixed-rate 90% LTV mortgages - (First-time buyer)

Provider Initial interest rate Monthly payment Upfront fees SVR
 

Progressive Building Society

2.40% £998 £170 4.35%
 

Nationwide Building Society

3.04% £1,071 £0 3.59%
 

Digital Mortgages 

3.04% £1,071 £10 3.50%

 

Cheapest 5-year fixed-rate 90% LTV mortgages - (First-time buyer)

Provider Initial interest rate Monthly payment Upfront fees
SVR
Darlington Building Society  3.34% £1,107 £1,025 3.59%
Digital Mortgages 3.24% £1,095 £10 3.50%
Bank of Ireland  3.19% £1,089 £210 4.09%

Cheapest 2-year tracker rate 90% LTV mortgages - (First-time buyer)

Provider Initial interest rate Monthly payment Upfront fees
SVR
Progressive Building Society 2.19% £974 £170 4.35%
Hinckley & Rugby Building Society  2.10% £964 £1,444 2.84%
Vernon  2.35% £992 £1,414 5.20%

 

Best 90% LTV mortgages for remortgaging

Based on a property valued at £250,000 with a £25,000 deposit and a mortgage term of 25 years. Assuming a repayment mortgage with the fees paid upfront.

Cheapest 2-year fixed-rate 90% LTV mortgages - (Remortgaging)

 

Provider

Initial interest rate Monthly payment Upfront fees
SVR
 

Digital Mortgages

3.04% £1,071 £10 3.50%
 

Hinckley & Rugby Building Society 

2.50% £1,009 £1,444 2.84%
 

Bank of Ireland 

2.87% £1,051 £210 4.09%

 

The cheapest 5-year fixed-rate 90% LTV mortgages - (Remortgaging)

Provider Initial interest rate Monthly payment Upfront fees
SVR
Digital Mortgages 3.24% £1,095 £10 3.50%
Bank of Ireland  3.19% £1,089 £210 4.09%
Hinckley & Rugby Building Society  3.15% £1,084 £1,444 2.84%

 

The cheapest 2-year tracker rate 90% LTV mortgages - (Remortgaging)

 

Provider

Initial interest rate Monthly payment Upfront fees
SVR
 

Hinckley & Rugby Building Society 

2.10% £964 £1,444 2.84%
 

Vernon 

2.35% £992 £1,414 5.20%
 

Newcastle Building Society 

2.85% £1,049 £125 3.96%

 

What are the advantages of a 90% LTV mortgage?

  • A 90% LTV mortgage can be a good option for first-time buyers who don't have the means to save a bigger deposit, particularly those looking to buy in expensive areas, where a deposit can run to tens of thousands of pounds.
  • A 90% LTV mortgage works out to be less expensive than a 95% LTV mortgage and there is a wider range of products available from a greater number of lenders.

What are the disadvantages of a 90% LTV mortgage?

  • As a relatively high LTV product, a 90% LTV mortgage is more expensive than lower ratio alternatives
  • There is a greater risk of buyers falling into negative equity, where the mortgage is more than the value of the property, particularly in a fluctuating market

What are the alternatives to a 90% LTV mortgage?

If you are thinking of taking out a higher LTV mortgage, read our articles "Which are the best 95% LTV mortgages - and should I get one?". Meanwhile, if you have a larger deposit available, you can find the best-buy 80% LTV mortgages in our article "Which are the best 80% LTV mortgages?"

 

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