95% LTV Remortgages

Trying to remortgage at 95% loan-to-value (LTV) is no mean feat. While various schemes and government incentives have made it easier to buy a property with a deposit of just 5%, mortgage lenders aren’t so accommodating if you’re looking to refinance at that level, meaning 95% remortgage deals aren’t always easy to come across.

That said, it certainly isn’t impossible to find them – it just takes a bit of preparation.

This guide will tell you everything you need to know about remortgaging at 95% LTV, how a broker can help and, crucially, how to secure the best deal.

Can you get a remortgage at 95%?

Yes, but it’s difficult. Lenders have historically shied away from high-LTV lending because of the heightened level of risk – if you were to default on your payments and the property was repossessed, they risk losing much more than if you had a 65% LTV loan, for example.

Most lenders would also expect you to have built up more equity by the time you need to remortgage, making these deals few and far between.

Yet it’s still possible to secure a 95% remortgage – you’ll just need to be selective in who you approach.

The majority of mainstream lenders don’t offer remortgages at this level which means looking to more niche mortgage providers, which is where specialist remortgage brokers can help.

Refinancing through the mortgage guarantee scheme

There may be another route to high-LTV remortgaging for some borrowers, and that’s by looking at the government’s mortgage guarantee scheme.

The scheme, which was launched in April 2021, was designed to encourage high-LTV lending by reducing the risk lenders are taking on, and it led to an increase in the number of 95% LTV mortgages available.

It isn’t commonly known, but lenders can make their mortgage guarantee deals available to remortgagors – though in reality, the majority of products are only offered to first-time buyers or home-movers, which means those seeking to remortgage may still have to do a bit of extra digging.

Yet if you can find a suitable product, you shouldn’t see any difference between a guarantee scheme mortgage and any other 95% LTV deal, and you won’t have to meet any additional requirements.

That said, mortgage rates can be a little higher, so it’s worth doing a whole market comparison to see the alternatives available and make sure you’re getting the best deal.

How to get a 95% LTV remortgage

If you’re coming to the end of your initial mortgage term but only have 5% equity in your home, here are the steps you can take to improve your chances of getting a 95% LTV remortgage.

Step one: Boost your credit profile

This is key when it comes to high-LTV borrowing. Mortgage providers are already taking on risk by lending to you at this level, so it’s important to reduce your risk profile elsewhere as far as possible – that means if your credit history is less than perfect, now’s the time to take action.

You should start by downloading your credit reports and looking for any inaccuracies, and if you spot any, contact the relevant credit reference agencies to get the mistakes removed.

If you’ve got time, you should aim to pay down any outstanding debts as well, as fewer credit commitments will always be viewed favourably by lenders.

Step two: Speak to a mortgage broker

The next step is to speak to a broker who specialises in high-LTV lending, as they’ll know the lenders to approach based on your individual circumstances – only a few offer 95% remortgages, so by knowing who to speak to in advance, you’ll save a lot of time, energy and potentially some money too.

This also means you’ll stand a better chance of being accepted, and of securing the best interest rates. Go it alone and you could end up paying far more than you need to, and you won’t be able to benefit from the advice that a specialist broker can offer.

Here at Online Money Advisor we can put you in touch with the brokers to help – make an enquiry to get started.

Step three: Get organised

Before you start actually approaching lenders, you’ll need to get organised. That means getting your various documents together – including proof of income, ID and details of any credit commitments – and working out what you can afford, ideally by using a mortgage calculator.

Once you’ve found a lender to approach you’ll need to get an agreement in principle, though bear in mind that if you originally bought your property through the Help to Buy scheme and now looking to remortgage, some lenders ask you to have a face-to-face appointment rather than going online.

Don’t worry though, as your broker will be able to take you through these processes to keep things as stress-free as possible.

How to find the best deals

High-LTV remortgages are always going to be more expensive because of the level of risk involved, so it’s important to do everything you can to get the rate down.

Knowing which providers are willing to lend at this level is vital, but this can be a significant first hurdle.

Even among the lenders who operate in this space, criteria will vary widely: for example…

• Some will only lend at 95% if you’re remortgaging for a particular purpose, such as buying out a partner, but not if you’re looking to use some of the funds to make home improvements.
• Others will only lend at 95% LTV if you’ve got a relatively low mortgage balance, with borrowers seeking more substantial loans expected to have more in the way of equity.
• Some lenders won’t lend at this LTV if other risk factors are present. For example, you have severe bad credit, are self-employed with less than two years’ proof of income, the new mortgage term will extend past your 75th birthday, or the property has non-standard construction.

The obvious solution is to do your research and speak to individual mortgage lenders, but this can be just as challenging, particularly as some of the best 95% remortgage deals (and often their lenders) are only accessible via intermediaries.

This means the best way to find the lowest rates is to speak to a broker who specialises in high LTV remortgages before you get started.

Get matched with an expert remortgage broker

Finding the broker that can help you navigate the world of 95% remortgages can make all the difference, and we can help.

Our unique broker matching service will put you in touch with the advisor who perfectly meets your needs – just tell us a few details and we’ll do the rest.

We’ll scour our network of advisors and do the introductions for you, and because we have specialists in low-deposit remortgages, you can be sure you’ll have the advice you need.

There’s no obligation and no enquiry fee, so get in touch today – call us on 0808 189 0463 or make an enquiry to get started.