Large Deposit Mortgages
Putting down a 25% or even 50% deposit for your next mortgage? Whether employed or unemployed, find out how to make the most of this in our expert guide!
Firstly, what will you do with the property?
No impact on your credit score
Author: Pete Mugleston - Mortgage Expert, MD
Updated: March 17, 2022
You don’t necessarily need a large deposit to get onto the property ladder. It’s perfectly possible to get a mortgage with a deposit as low as 5%.
But if you can afford a large deposit mortgage, there can be advantages – particularly if your income, credit score or other factors might otherwise make mortgage lenders think twice.
Read on for everything you need to know about getting a mortgage with a large deposit, including the benefits of putting down more than the minimum amount and how the right mortgage broker can help you make the most of them.
The following topics are covered below...
What do mortgage lenders consider a large deposit?
A deposit of 25% or above is considered a large deposit – this is the point at which you’ll start to see really competitive mortgage deals, but some lenders offer greater incentives than others for putting down this amount or more.
If you have a healthy amount of deposit to your name, it can still be challenging to get the very best deal available, unless you know the mortgage market inside out.
But the good news is that there are brokers who specialise in helping customers with large deposits secure the best interest rate available.
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Maximise your chance of approval with specialist advice from a mortgage expert.
The benefits of putting down a large deposit
The more of your home you own outright, the less likely you are to fall into negative equity if the value of your property falls.
Reducing the risk of negative equity is good news for you, because it means you’re less likely to have trouble selling your home in the future. And it also makes you more attractive to potential mortgage providers.
This means you’ll have a wider pool of providers to choose from when shopping around to find. Other benefits of putting down a larger deposit include…
- You’re more likely to land a favourable interest rate
- Your mortgage repayments can be lower
- It could boost your eligibility if risk factors, such as bad credit, are present
- Lower affordability requirements to meet
In summary, the larger your deposit, the less expensive the capital repayments on your mortgage will be.
This is not only because you’ll need a smaller loan, but also because mortgage lenders will usually offer you cheaper interest rates the larger your deposit is.
Getting a mortgage with 25% deposit
Once you get to the 25% deposit mark, mortgage rates tend to get more competitive – and you’ll find it easier to access a mortgage even with some complicating factors such as bad credit or a non-standard construction property.
Very competitive mortgage interest rates are available to buyers who can put down a deposit of 40% or more. A 50% mortgage will unlock the best rates, provided you know which lenders to approach.
A 50% deposit won’t be possible for most mortgage borrowers – especially first-time buyers. You’re more likely to be in this situation as a customer looking to remortgage, if you’re using proceeds from a previous property sale as a deposit for your next home.
Again, this is unusual. But if you’re able to access this kind of deposit, you stand a great chance of getting a great mortgage deal.
However, bear in mind that some mortgage lenders impose a minimum loan amount on residential mortgages – often around the £75-80,000 mark.
So if you’re hoping to put down a large deposit on a property that would take you below that limit, you might have to look around to find a mortgage lender who can help.
Use a mortgage calculator to work out how much you’d want to borrow, and then use a broker to help find the right lender for you.
Work out the loan-to-value (LTV)
If you know how much deposit you have for the property you’re looking to buy, use our calculator below to work out what your overall LTV will be.
Remember, the higher the deposit, the lower the LTV and the better chance you have of attracting more lenders towards your application.
This calculator will tell you what your loan-to-value (LTV) ratio is, based on the property's value, your deposit/equity and the amount you're borrowing.
Your LTV is
This means that most mortgage providers will consider your deposit amount to be more than satisfactory, but speaking to a broker is still recommended to ensure you get the best deal.
This means you’re likely to meet the deposit requirements at most lenders, but since many reserve their best rates for those with higher deposits, speaking to a broker is recommended.
Many mainstream mortgage providers would consider this high and be reluctant to lend. Applying through a mortgage broker may be necessary to find a specialist low deposit mortgage lender.
LTVs have a direct impact on the rates available to you - speak to a mortgage broker and find out how to get the best deal based on your ratio.
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How a broker can help you
A mortgage broker can provide bespoke, expert mortgage advice to help you get the best rate from the right lenders.
This is especially important when you’re hoping to access the competitive rates that come with large deposit mortgages.
An expert broker will be able to match you with handpicked lenders, based on your deposit amount, who will…
- Reward you appropriately for your deposit amount
- Be sympathetic to your situation, whether that’s a low income, no job or bad credit
- Accept the source of your deposit. (For example, some mortgage lenders are happy to work with borrowers who have been given their deposit as a gift, but only by family members – whereas other lenders might be okay with gifts from close friends as well. Some lenders will refuse a mortgage where the deposit comes from gambling winnings – some won’t.)
Can you get a mortgage with no job but a large deposit?
Yes, under the right circumstances, but you might find it more difficult than somebody who’s in secure employment. In general, mortgage lenders like to be reassured that borrowers will be able to keep up with their mortgage repayments – in other words, they prefer to lend to someone with a job.
But some mortgage lenders will be prepared to offer you a mortgage without a job as long as you have other sources of income, such as a pension.
You may also be able to access a buy-to-let (BTL) mortgage, as long as you can guarantee a minimum rental income (often £25-30,000) from the property.
You won’t have a huge range of mortgage lenders to choose from without a job. But a large deposit, and the right advice, will give you the best possible chance of finding a lender who can help.
You’ll also be more likely to be accepted for a mortgage without a job if you, and the property you’re seeking to buy, can meet any or all of the following criteria:
- Other capital besides your salary
- A good credit rating
- Low outgoings
- An inexpensive property.
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What if I have a large deposit but low income?
It’s harder to get a mortgage with a low income, but it’s not impossible. And a large deposit will help.
This is because mortgage lenders don’t just consider your income, when it comes to deciding whether or not to offer you a mortgage.
They consider your overall affordability – your ability to make your mortgage repayments alongside all your other expenses.
So if you can offer a large deposit, making the monthly repayments on your mortgage smaller and more affordable, this could increase your chances of being approved by a lender.
Mortgage lenders typically offer a loan of up to four and a half times your annual salary.
So if your salary is relatively low, you might need a larger deposit to cover the remaining value of the property.
Use a mortgage calculator to work out how much you’ll need, and look for a mortgage broker who specialises in large deposit mortgages for those on low incomes.
Again, you’ll usually be more likely to be offered a mortgage if you have additional capital, a good credit score, low outgoings and/or an inexpensive property in mind.
Get matched with a broker who specialises in large deposit mortgages
Speaking to a whole-of-market broker is the best way to find a mortgage lender that is right for your circumstances and will offer you the most competitive rates based on your deposit amount.
You might think that having a large deposit alone is enough to get the most favourable rates on the market, but some lenders offer greater incentives than others for putting down more than the minimum amount of deposit.
To get the best deal, you’ll need access to the entire mark, which is exactly what the brokers we can match you with will provide.
Just get in touch on 0808 189 0463 or make an enquiry online and we’ll connect you to one of the expert brokers we work with for a free, no-obligation chat.
They will be able to answer all your questions, and give you advice about getting a mortgage based on your own specific set of circumstances.
Get Started with a Broker
Maximise your chance of approval with specialist advice from a mortgage expert.
It’s not impossible.
You’ll be dealing with a smaller pool of potential lenders, but the brokers we work with may be able to connect you with a mortgage lender who can help.
It depends on a number of factors including your assets, the size of your deposit, and the nature of your adverse credit history. Just get in touch, and the expert advisors we work with will help you identify any lenders who can help.
If you’re on a low income and hoping to maximise your deposit, there may be government help available: take a look at the Help To Buy scheme or speak to a broker to find out what other options are available.
There’s no simple answer to this. It depends on a number of factors, including the mortgage lender, the value of the property you’re applying for a mortgage to buy, and your expenses.
The best thing to do is get in touch with an expert broker who can look at your situation as a whole and find the right mortgage lender for you.
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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in mortgage deposits. Ask us a question and we'll get the best expert to help.
Mortgage Expert, MD
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!