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80% mortgages (20% deposit mortgages)
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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 an 80% LTV mortgage?
An 80% loan-to-value (LTV) mortgage is any home loan, where you have a 20% deposit to put down on a property and therefore need to borrow the remaining 80% from a mortgage lender.
The ‘80%’ refers to the ratio between the amount borrowed (80%) and the total cost of the house (100%), which is also known as LTV. You may also see this referred to as a 20% deposit mortgage.
If a property is worth £100,000, with a deposit of £20,000 and a mortgage of £80,000 the LTV of the mortgage is 80%
How do 80% LTV mortgages work?
With an 80% mortgage, you put down a 20% cash deposit – this will usually be from your personal savings or the equity you've built up in your current property.
You'll then borrow the remaining 80% from the bank or building society who is providing the mortgage. You'll repay this amount alongside interest over the course of the mortgage term. Terms vary based on your age, circumstances and preference but a typical residential mortgage term in the UK is 25-30 years.
The table shows the deposit amount needed to get an 80% LTV mortgage based on properties of different values.
| Property value | Deposit amount (20%) | Mortgage loan amount (80%) |
|---|---|---|
| £200,000 | £40,000 | £160,000 |
| £300,000 | £60,000 | £220,000 |
| £400,000 | £80,000 | £320,000 |
Best 80% LTV mortgage rates
The table below shows some of our partner Mojo's best 80% LTV mortgage rates for two-year and five-year fixed deals. These are based on the initial rate available - which last for two or five years in this case - but longer deals are available. The LTV is the percentage of the total property value that you borrow.
The Annual Percentage Rate of Change (APRC) has also been included after the initial rate for each deal - as it can be useful when comparing the overall cost of different deals. This is because APRC takes fees and the lender's standard variable rate (SVR) into account.
The SVR is the lender's default interest rate that you'll pay when your initial deal ends. Keep in mind that if you plan to remortgage onto another deal at the end of their introductory deal, rather than moving onto the SVR, the APRC becomes less useful.
- 2 years
- Fixed rate
- Monthly repayment£ 1,256.54
- Loan to value80 %
- Initial interest rate4.59 %
- Variable rate7.74 %
- APRC7.4%
- Product fees£ 1,525
Representative example:Repayment mortgage of £224,000.00 over 25 years, representative APRC 7.4%. Repayments: 28 months of £1,256.54 at 4.59% (fixed), then 272 months of £1,657.06 at 7.74% (variable). Total amount payable £485,903.44. Early repayment charges apply until 31-Mar-2027. Arrangement, mortgage discharge, valuation and CHAPS fees total £1525.
- 2 years
- Fixed rate
- Monthly repayment£ 1,255.30
- Loan to value80 %
- Initial interest rate4.59 %
- Variable rate7.24 %
- APRC7.1%
- Product fees£ 995
Representative example:Repayment mortgage of £224,000.00 over 25 years, representative APRC 7.1%. Repayments: 28 months of £1,255.30 at 4.59% (fixed), then 272 months of £1,588.04 at 7.24% (variable). Total amount payable £467,095.28. Early repayment charges apply until 31-Mar-2027. Arrangement, mortgage discharge, valuation and CHAPS fees total £995.
- 2 years
- Fixed rate
- £ 250 cashback
- Monthly repayment£ 1,257.85
- Loan to value80 %
- Initial interest rate4.61 %
- Variable rate8.24 %
- APRC7.8%
- Product fees£ 1,099
Representative example:Repayment mortgage of £224,000.00 over 25 years, representative APRC 7.8%. Repayments: 28 months of £1,257.85 at 4.61% (fixed), then 272 months of £1,723.63 at 8.24% (variable). Total amount payable £504,047.16. 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£ 1,261.65
- Loan to value80 %
- Initial interest rate4.63 %
- Variable rate7.74 %
- APRC7.4%
- Product fees£ 1,025
Representative example:Repayment mortgage of £224,000.00 over 25 years, representative APRC 7.4%. Repayments: 28 months of £1,261.65 at 4.63% (fixed), then 272 months of £1,657.56 at 7.74% (variable). Total amount payable £486,182.52. Early repayment charges apply until 31-Mar-2027. Arrangement, mortgage discharge, valuation and CHAPS fees total £1025.
The above rates are provided by Mojo Mortgages and updated every 12 hours. THEY MAY NOT BE AVAILABLE WHEN YOU'RE READY TO SUBMIT AN APPLICATION.
Can I get an 80% mortgage?
The key thing you'll need to be eligible for an 80% LTV mortgage is a deposit worth 20% of the property value. Lenders usually need you to prove that your deposit funds came from an approved source.
Mortgage statistics suggest that for a 20% deposit mortgage application, much like any other, you'll also need to meet the lender's other criteria. This will usually be:
Income – you can borrow around 4-4.5 times your annual income
Expenditure – your lender will review your outgoings and spending habits to determine if you can afford the repayments
Credit history – the lender will want to see if you're reliable at managing debt and will check your credit history to do this. Those applicants with the strongest credit and financial history are most likely to be able to access the best 80% LTV mortgage rates
You'll also need to provide the necessary supporting documentation, such as proof of income and bank statements, and be within the minimum and maximum age limits for the specific mortgage product.
Advantages of an 80% LTV mortgage
You'll usually get access to better mortgage rates than with a higher LTV mortgage, such as 90% LTV
You'll pay less in interest over your full mortgage term than if you borrowed more than 80%
You're less likely to fall into negative equity compared to a higher LTV mortgage
A 20% deposit is easier to save up than 30 or 40%, so you might be able to buy your home more quickly and can keep some money back for home renovations or an emergency fund
Disadvantages of an 80% LTV mortgage
You’ll usually pay a higher rate of interest than with a lower LTV mortgage, such as 70% LTV
You could have fewer mortgage deals to choose from compared to those taking out a mortgage with a larger deposit
A 20% deposit may still be challenging to save, particularly if you're a first-time-buyer
80% LTV buy-to-let mortgages
Buy-to-let mortgages are for people who are buying or remortgaging a property to let to tenants for a profit. They are usually taken as interest-only mortgages and tend to have higher interest rates and fees than residential mortgages due to their commercial intent.
80% LTV is likely to be the maximum loan size available for buy-to-let mortgages, and few lenders will offer this. Most will require a deposit greater than 20% - usually 25-40%.
Like residential mortgages, the lower your LTV the cheaper the mortgage rates you’ll get - so it’s worth paying as big a deposit as possible.
Whether or not you get a 80% LTV buy-to-let mortgage, the lender will want to make sure that the rental income the property can achieve will cover 125% to 145% of the monthly interest payments for the amount you want to borrow.
Buy-to-let mortgages are not normally regulated by the Financial Conduct Authority (FCA) as they're seen as products for businesses rather than consumers. Recent buy-to-let statistics found that there were 83,000 buy-to-let mortgages were approved in 2023, and that number is only expected to rise.
If you're able to save a 20% deposit or build up that level of equity in your home, an 80% LTV mortgage generally gives you access to ”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.