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60% LTV mortgages
Finding the right 60% mortgage deal can be really tricky. What is LTV? Should I fix my rate? Are there extra fees? So, let Mojo’s expert comparison call compare deals to find your best 60% LTV mortgage rate.
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YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
The FCA does not regulate mortgages on commercial or investment buy-to-let properties.
What is a 60% LTV mortgage?
A 60% loan to value (LTV) mortgage is available when you have a deposit of at least 40% of the value of the property you’re buying or remortgaging.
LTV shows how big your deposit is relative to the value of the property. You won't need an LTV mortgage calculator to work out that this means you'll be borrowing the remaining 60% of the property value from the lender.
A 60% LTV ratio is considered quite low, so you'll generally be seen as less risky by the lender which should help you access your best mortgage rates.
How do 60% LTV mortgages work?
With a 60% LTV mortgage, you put down a deposit worth 40% of the property value – the remaining 60% is funded by the lender as a mortgage. The actual mortgage works the same as any other mortgage deal – you repay the amount you've borrowed over a predetermined time period (mortgage term).
Some mortgages are repaid on an interest-only basis, although if you're buying a residential home, it's more likely that you will have a capital repayment mortgage where you repay an element of the loan, and the interest each month. If you are providing a 40% deposit, the mortgage interest rates available to you will be some of the best on the market. The table opposite shows how much the deposit and loan amount would be for a 60% LTV mortgage for a range of different property values.
| Property value | Deposit amount (40% of property value) | Mortgage loan amount (60% of property value) |
|---|---|---|
| £200,000 | £80,000 | £120,000 |
| £300,000 | £120,000 | £180,000 |
| £400,000 | £160,000 | £240,000 |
| £500,000 | £200,000 | £300,000 |
| £600,000 | £240,000 | £360,000 |
Best 60% LTV mortgage rates
This table shows some of our partner Mojo's best 60% LTV mortgage rates. LTV (or loan to value) is the amount you borrow compared to the value of the property - so in this case 60% of the full value. This is based on the initial rate that you pay during the introductory deal period (for a two-year fixed-rate mortgage, the introductory period is two years).
The Annual Percentage Rate of Change (APRC) can also be found after the initial rate for each deal. This takes fees and the lender's standard variable rate (SVR) into account, so can be useful when comparing the overall cost of different mortgage deals.
Keep in in mind that APRC is less useful to those planning to remortgage onto another deal at the end of their introductory deal, rather than moving onto the SVR.
- 2 years
- Fixed rate
- Monthly repayment£ 907.30
- Loan to value60 %
- Initial interest rate4.22 %
- Variable rate6.74 %
- APRC6.5%
- Product fees£ 1,014
Representative example:Repayment mortgage of £168,000.00 over 25 years, representative APRC 6.5%. Repayments: 27 months of £907.30 at 4.22% (fixed), then 273 months of £1,140.54 at 6.74% (variable). Total amount payable £335,864.52. Early repayment charges apply until 31-Mar-2027. Arrangement, mortgage discharge, valuation and CHAPS fees total £1014. Legal fees £126.
- 2 years
- Fixed rate
- Monthly repayment£ 908.24
- Loan to value60 %
- Initial interest rate4.23 %
- Variable rate6.74 %
- APRC6.5%
- Product fees£ 1,014
Representative example:Repayment mortgage of £168,000.00 over 25 years, representative APRC 6.5%. Repayments: 27 months of £908.24 at 4.23% (fixed), then 273 months of £1,140.63 at 6.74% (variable). Total amount payable £335,914.47. Early repayment charges apply until 31-Mar-2027. Arrangement, mortgage discharge, valuation and CHAPS fees total £1014. Legal fees £126.
- 2 years
- Fixed rate
- £ 250 cashback
- Monthly repayment£ 907.37
- Loan to value60 %
- Initial interest rate4.23 %
- Variable rate8.24 %
- APRC7.7%
- Product fees£ 1,099
Representative example:Repayment mortgage of £168,000.00 over 25 years, representative APRC 7.7%. Repayments: 27 months of £907.37 at 4.23% (fixed), then 273 months of £1,290.23 at 8.24% (variable). Total amount payable £376,731.78. Early repayment charges apply until 31-Mar-2027. Arrangement, mortgage discharge, valuation and CHAPS fees total £1099. Legal fees £161.27.
- 2 years
- Fixed rate
- Monthly repayment£ 914.89
- Loan to value60 %
- Initial interest rate4.31 %
- Variable rate8.24 %
- APRC7.5%
- Product fees£ 1,733
Representative example:Repayment mortgage of £168,000.00 over 25 years, representative APRC 7.5%. Repayments: 26 months of £914.89 at 4.31% (fixed), then 274 months of £1,285.60 at 8.24% (variable). Total amount payable £373,525.86. Early repayment charges apply until 28-Feb-2027. Arrangement, mortgage discharge, valuation and CHAPS fees total £1733. Legal fees £120.
The above fixed rates are provided by Mojo Mortgages and updated every 12 hours. THEY MAY NOT BE AVAILABLE WHEN YOU'RE READY TO SUBMIT AN APPLICATION.
Why get a 60% LTV mortgage?
A key reason to aim for a 60% mortgage is that the lower your LTV ratio, generally the lower your mortgage rate will be. This is because the lender will consider you a less risky borrower and can loan you money at a more competitive rate.
According to UK mortgage statistics, more than 110,000 residential mortgage holders were in arrears at the start of 2024. The bank will submit your finances to stress tests, to avoid the risk of you going behind on monthly payments. Having a lower LTV means your monthly repayments will be less than if you had, for an example, a 90% LTV.
A 60% LTV mortgage is typically one of the lowest thresholds offered by lenders, which means these deals will likely have some of the best and cheapest interest rates available.
Plus, putting down a 40% deposit as opposed to a smaller one, means you'll have to borrow less. Borrowing less means you'll pay less in interest over the course of your mortgage. You may also be able to repay it more quickly than if you borrowed a greater percentage of the property value.
Mortgage interest rates rose across the board throughout 2022, so opting for a lower LTV ratio (if you're able to save up a larger deposit) will help you access better interest rates and reduce the amount you'll pay in interest overall.
Lending criteria for 60% mortgages
To be eligible for a 60% LTV mortgage, you will need to save up a deposit of 40%, which is not going to be easy for most buyers to save.
Most people raise the money for a 40% deposit when they've already owned property before, typically from the sale of their home, or savings built up over many years. These mortgages are generally more difficult to get if you're a first-time buyer.
Of course, you'll also need to meet the lender's other criteria, which, in addition to deposit size, often includes:
Income - you can typically borrow around 4 to 4.5 times your annual income.
Expenditure - lenders will look at your spending habits and outgoings in addition to your income to check you can afford the monthly repayments.
Credit history - checking your credit history allows lenders to see if you have a history of managing debt well.
Can I get a 60% mortgage with bad credit?
If you've got bad credit and are looking for a mortgage, having a larger deposit may help encourage some lenders to consider you as this will reduce the risk slightly. However, having a 40% deposit is still not a guarantee that you'll be accepted.
If you've got bad credit, it's worth taking steps to try and improve that (by taking out a credit building card for example) and speaking to a mortgage broker who can help identify lenders who may be willing to consider you.
What types of 60% LTV mortgage rates could I get?
With mortgage deals, there are two main types of mortgage rate you can get – fixed and variable.
Fixed mortgage rates
A fixed mortgage rate means your interest rate (and therefore monthly repayments) will be fixed for the duration of your deal.
Fixed rate deals are often popular as borrowers have peace of mind that their repayments will stay the same for a set period of time, even if interest rates rise. This makes it a good option for those who need to stick to a specific budget.
However, the downside of a fixed rate mortgage is that if mortgage interest rates decrease during your deal, you won't benefit from a reduction in your monthly repayments.
Fixed rate deals typically have higher rates than variable rate mortgage deals, such discount and tracker rates. This is due to the fact that they will remain the same over the deal period, while discounted and tracker rates are subject to change.
Two-year fixed-rate mortgages and five-year fixed-rate mortgages are the most common deal lengths, but you can get longer deals.
How long a deal you should opt for depends on you and your personal circumstances, including how long you expect to stay in the property for and whether you'd like repayments to remain the same for a longer period of time.
Variable rate mortgages
A variable mortgage rate is subject to change during your deal. This means your monthly repayments won't necessarily stay the same - they may increase (or decrease) depending on mortgage interest rate fluctuations.
The main types of variable rates are discounted, tracker and standard variable rate (SVR).
Discount mortgage – the interest rate is pegged at a certain level below the lender's SVR. It will rise and fall in line with the SVR.
Tracker mortgage – the interest rate is set a specific level above an external financial indicator, often the Bank of England (BofE) base rate. A tracker mortgage rate will rise and fall along with the base rate.
SVR – you'll normally go onto your lender's SVR once your initial deal comes to an end. This is often higher than the rate you'll have been paying so it's often worth remortgaging in order to get the best deal, unless you're moving or only have a small amount to pay off on your mortgage.
The main thing to remember with variable rates is that, even though the mortgage rates can appear lower than fixed deals at first glance, your monthly repayments could increase substantially if interest rates rise. Make sure you could afford repayments if this were to happen.
Advantages of 60% mortgages
A low LTV ratio generally allows you access to better mortgage rates and deals
You'll have borrowed less compared to a higher LTV ratio, meaning you'll pay less in interest overall
You're less likely to fall into negative equity compared to if you put down a smaller deposit
Disadvantages of 60% mortgages
It can take a while to save up a 40% deposit , so you may be able to purchase a home more quickly with a higher LTV deal
You may be better to hold some of your mortgage deposit money back for home renovations or an emergency fund
In the current market, interest rates are fairly high, so a 60% LTV mortgage is a good option if you're able to raise the 40% deposit. This is because you'll generally get access to better deals than with a higher LTV mortgage”Kellie Steed, Mortgage Content Writer
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YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
The FCA does not regulate mortgages on commercial or investment buy-to-let properties.
Uswitch makes introductions to Mojo Mortgages to provide mortgage solutions. Uswitch and Mojo Mortgages are part of the same group of companies. Uswitch Limited is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number 312850. You can check this on the Financial Services Register by visiting the FCA website. Uswitch Limited is registered in England and Wales (Company No 03612689) The Cooperage, 5 Copper Row, London SE1 2LH. Mojo Mortgages is a trading style of Life's Great Limited which is registered in England and Wales (06246376). Mojo are authorised and regulated by the Financial Conduct Authority and are on the Financial Services Register (478215) Mojo’s registered office is The Cooperage, 5 Copper Row, London, SE1 2LH. To contact Mojo by phone, please call 0333 123 0012.