A 90% loan to value (LTV) mortgage allows you to buy a home with just a 10% deposit. With 90% LTV mortgages, you need a deposit that’s 10% of the property’s value (or 10% equity in a current property if you’re looking to remortgage). The term ‘loan to value’ describes the size of the mortgage in relation to the property value. For example, if you’re buying a property costing £250,000, you’d put down a deposit of £25,000 (10% of £250,000). That would mean you’d take out a 90% mortgage for the remaining £225,000 (90% of £250,000).
However, it’s important to remember that 90% loan to value mortgage rates are usually higher than other types of mortgages where you’re putting a larger deposit down. That’s because lenders are taking on a higher level of risk. Having said that, 90% mortgages for first time buyers do tend to be cheaper than 95% deals.
The other downside of 90% mortgages to bear in mind is that, if property prices fall, you could end up owing more than the property is worth - known as ‘negative equity’.
This type of mortgage is similar to a 95% mortgage - that is, where you put down just 5% deposit and take out a mortgage for 95% of the value of your home. Whether you choose either of these options or a different type of mortgage is entirely dependent on your personal circumstances, but our experienced mortgage advisors are happy to talk you through the options to help you make your decision.
90% mortgage process
Our Mortgage Finder tool allows you to filter down the options available to you so you can compare 90% mortgage rates you might qualify for in a matter of minutes - and our expert advisers are on hand to offer all the advice you need.
We’ll support you through the application process, letting you know the information you’ll need to provide your lender with as well as doing all the legwork on your behalf. Get in touch today to get started.
90% mortgage eligibility criteria
90% mortgage lenders are looking to see that you can afford your mortgage payments both now and in the future should rates rise. So you’ll need to be able to demonstrate this through your income, previous spending history and credit score.
Each lender has different criteria when it comes to mortgages but in general they’re looking to assess affordability. That means looking at the amount you earn as well as how much you spend, so you should come prepared with your bank statements and details of any debt including credit and store cards.
To improve your chances of being offered good 90% LTV mortgage rates, make sure you check your credit score before applying for a mortgage. This is free to do via credit reference agencies like Experian and Equifax, and it gives you the opportunity to amend any mistakes before going any further with your application.
If you’re looking for a 90% Buy to Let mortgage, it may be trickier as lenders typically require that you put down a deposit of at least 25% if you want to rent out your property. Some lenders will accept smaller deposits of around 15% if you can demonstrate the rental income is sufficient, but 90% Buy to Let mortgages are rare.
Finding the best 90% LTV mortgage deals
If you want peace of mind that your mortgage payments won’t change if interest rates rise, you might want to consider locking into a fixed rate 90% mortgage deal. Alternatively, you might prefer a variable rate 90% deal if you believe that interest rates are likely to stay low for longer.
Whichever type you choose, we’ll give you our expert advice and search across the market to find the best 90% mortgage rates for you. When you’re ready to submit your application online or over the phone, we’ll search thousands of 90% mortgage interest rates to find the best deal for you.
90% LTV remortgage deals
If your current deal has come to an end and you’re looking to remortgage your home then a 90% LTV remortgage might work for you, depending on how much equity you have in your property. With this type of mortgage, you’ll get a loan of 90% of the value of your property if you have 10% equity.
If you currently have more than 10% equity in your property, this can be a great way of financing home improvements. But remember that you may have to contend with higher interest rates as, in general, the lower LTV, the better the mortgage interest rate. If you started on a 95% mortgage and now have 10% equity in your property, it’s worth looking at remortgaging to a 90% deal as the interest rate may be lower. Whatever your circumstances, we’ll work hard to find the best 90% remortgage deals for you, so just get in touch with us today to discuss your options.
