Best LTVs and Mortgage Interest Rates

Whether you’re buying your first home or remortgaging, your loan-to-value (LTV) ratio is crucial as it influences the interest rate you’ll pay, and therefore, the overall cost of your mortgage.

In this comprehensive article, we explain everything you need to know about LTV ratios and mortgage rates, including what the best LTV ratio is for a mortgage and how a broker can help you get the best deal.

What is the best loan-to-value ratio for a mortgage?

Ideally, you should aim for an LTV of under 80%. Generally speaking, the lower your LTV, the lower your interest rate is likely to be. That means the smaller your monthly repayments, and the cheaper your mortgage will be overall.

Why will your rate be lower? Because simply put lenders will view you as less risky the more of your own money you’re investing into the property purchase. They’ll charge you a lower rate as a result.

Today’s best rates for each LTV band

The table below outlines all the best rates currently available for each LTV band:

The rates and terms outlined in the table above are correct at the time of writing (March 2023) and are subject to change at any time at the lender’s discretion.

How a broker can help get the best deal

Whatever your LTV ratio, it’s always worth seeking advice from an experienced broker when applying for a mortgage as they’ll be able to find you the best deal in your specific LTV band.

An independent broker will have access to the entire range of products available across the market and will shop around on your behalf to find a home loan to suit your specific circumstances.

They’ll also be able to introduce you to specialist lenders if your situation is complex, and help prepare your application.

If you have a high LTV – 80% or above – talking to a whole-of-market broker should be non-negotiable. They’ll know which lenders are most likely to accept your application, which will be flexible, and where the best deals for borrowers with small deposits can be found.

We have expert brokers in our network who specialise in helping borrowers with both small and large LTV ratios. Get in touch and we’ll match you with a broker today. 

What rate to expect with 100% LTV

A very limited number of lenders could possibly offer 100% LTV mortgages, also known as 0% deposit mortgages but the eligibility criteria would be quite rigorous. These used to be easier to come by but have been almost non-existent since the 2008 financial crisis.

Lenders consider these to be extremely risky loans so even if you did qualify you’ll typically have to pay a much higher rate of interest as a result.

Ultimately it may make more financial sense to study all avenues you can to save for a deposit, even if it means delaying your house purchase plans in the interim period as you could save more in the long run on your interest payments.

Why Use Online Money Advisor

If you want to secure the most competitive mortgage rate, talk to an independent broker who specialises in your specific LTV band.

Our broker matching service can connect you with an expert who will be able to review your situation and advise you on how to secure the right home loan for your situation.

Give us a call on 0808 189 0463 or make an enquiry and get matched with an expert today for a free initial conversation.