40% LTV Mortgages

Welcome to our guide to 40% LTV mortgages. Here you will learn what they are, what rates are available, how to access the best deals and more.

What is a 40% LTV mortgage?

A 40% LTV mortgage is a mortgage with a loan-to-value ratio of 40%, which means it would cover 40% of the property’s value or purchase price. The remaining 60% would come from the borrower’s deposit funds or existing equity, if the agreement in question is a remortgage.

If you have this amount of deposit or equity, you will likely be in a strong position to get approved for the mortgage you need and access the best rates available, assuming there are no risk factors present, such as a history of bad credit or complex income.

And even if such risk factors are present, you will stand a much better chance of mortgage approval than somebody with a small deposit or minimal amount of equity.

What rates are available at 40% LTV?

Assuming there are no risk factors for the lender to take on board, you should be able to access the best mortgage rates with an LTV of 40% (or 60% deposit).

Our live rates service below shows the latest rates for 40% LTV mortgages and allows you to compare these deals in real time:

What are the benefits of a deposit this large?

Mortgage lenders reserve their best deals for borrowers with 50-60% LTV or lower. The main benefits to having this amount of deposit or equity are as follows:

• Lower mortgage rates: The lowest rates on the market kick in at 60% LTV and don’t usually get much more favourable from this point.
• More flexibility: You might be able to access mortgage products with flexible features, such as the option to make uncapped overpayments.
• More product choice: Longer fixed rate mortgages and the option to take out a mortgage on an interest-only basis are sometimes reserved for low LTV borrowers.
• Greater borrowing capacity: Most mortgage lenders cap maximum borrowing at 4.5 times salary, but borrowers with an LTV as low as 40% may be offered a mortgage based on 5 times salary or 6 times salary under the right circumstances.
• Increased chance of approval for higher risk borrowers: With a low loan-to-value ratio, you will stand a better chance of qualifying for a mortgage with bad credit, complex income or a non-standard property type than someone with a low deposit.

In addition to the above advantages, putting down a 60% deposit will mean you pay off your mortgage quicker and will own your home outright sooner.

Compare 40% LTV mortgages online for free

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Buy-to-let mortgages for borrowers with 60% deposit

With 40% LTV, you should have access to the most favourable deals on the market. Rates on buy-to-let mortgages, in general, are around one full percentage point higher than residential agreements, but the best rates kick in at around 60-65% LTV.

Longer-term fixed rate deals (with introductory rates periods of five years plus) tend to have some of the lowest rates, while tracker buy-to-let mortgages have some of the highest.

With 60% deposit, you will also qualify for specialist types of buy-to-let mortgage, such as:

• HMO mortgages
• Holiday let mortgages
• Multi-property mortgages
• First-time buyer buy-to-let mortgages

How much your mortgage will cost

To work out how much a 40% LTV mortgage will cost each month and overall, first deduct your 60% deposit from the amount you need to borrow. Next enter this figure into the calculator below along with an interest rate and term length to get quick results.

Why choose Money Helpdesk for your mortgage needs?

Now that you have done your research, our brokers can compare 40% LTV rates and deals for you and offer bespoke advice on which to choose.

Here are just some of the reasons people choose to apply for a mortgage through us:

• We can access rates from across the market for you in seconds
• Our brokers can offer bespoke advice on high deposit mortgages
• We are 5-star rated on leading review websites
• It takes minutes to secure your agreement in principle

Ready to take advantage of a free, no-obligation chat with a whole-of-market mortgage broker? Get started here.