A 75% loan to value (LTV) mortgage is one where you borrow 75% of the value of the property you’re buying. The remaining 25% of the purchase price comes from your deposit. For example, if you borrow £225,000 on a £300,000 home, your LTV is 75%.
Interest rates on 75% LTV mortgages are generally cheaper compared to deals that require a smaller deposit of say 5-15%. This is because lenders consider mortgages with a lower LTV to be less risky as you’ll own more of the property at the start of the mortgage and you’re less likely to slip into negative equity if property prices fall. Negative equity is when the value of your home is worth less than what you owe on your mortgage.
However, the most competitive mortgage rates are usually reserved for those with a deposit of at least 40%.
You save a deposit equal to 25% of the price. The lender covers the rest. On a £200,000 home, that's a £50,000 deposit and a £150,000 mortgage.
You don't need cash. Your equity does the job of the deposit. Equity is the part of your home you own outright: its value minus what you still owe.
Say your home is worth £300,000 and you owe £210,000. Your LTV is 70%, and you have 30% equity. That's enough for a 75% LTV remortgage. To stay at 75% or below, you can owe up to £225,000.
Most 75% LTV mortgages for a home you live in are repayment mortgages. Each month you pay back some of what you borrowed, plus interest. At the end of the term, you own your home outright.
With an interest-only mortgage, you pay only the interest each month. You then need to repay everything you borrowed when the term ends. Lenders are cautious about offering these to homebuyers. They're far more common for buy-to-let.
You need 25% of the property's price. Here's what that looks like at different prices.
| Property price | Deposit you need (25%) | Most you can borrow (75%) |
|---|---|---|
| £150,000 | £37,500 | £112,500 |
| £200,000 | £50,000 | £150,000 |
| £250,000 | £62,500 | £187,500 |
| £300,000 | £75,000 | £225,000 |
| £400,000 | £100,000 | £300,000 |
| £500,000 | £125,000 | £375,000 |
These figures are examples, not offers. Lenders also charge fees, and you'll need money for costs such as legal fees and Stamp Duty. See our guide on how much it costs to buy a home.
Rates change often, and your rate depends on you and the deal. These are the main things that shape it:
Your LTV band
How long the deal lasts
Your credit record and income
The size of your mortgage
Fees, such as arrangement and valuation fees
For trackers, the Bank of England base rate
The headline rate isn't the full picture. The APRC (annual percentage rate of charge) shows the cost of a mortgage over its whole term. It includes fees and the rate you move to when your deal ends. Check it alongside the headline rate.
Mojo checks 75% LTV deals across the market for your situation.
Your rate and monthly payments stay the same for the whole deal.
Deals usually last two, three or five years, but some run to 10. Fixed rates can start higher than variable ones. In return, you're protected if rates rise, and you know what you'll pay each month.
The lender can change your rate whenever it wants. It doesn't have to follow the Bank of England base rate. Your monthly payments can go up or down, so build that into your budget.
A tracker mortgage follows another rate, usually the Bank of England base rate. If the base rate falls, your payments fall. If it rises, they rise. Some trackers have a floor, which means your rate won't drop below a set level, even if the base rate does.
A discounted mortgage is where the interest rate is pegged at a set amount below your lender’s standard variable rate (SVR), typically for a term of two or five years. For example, if your mortgage offers a 1.5% discount and the SVR is 5%, your interest rate would be 3.5%. This means your mortgage rate will rise and fall by the same amount as your lender’s SVR.
A capped rate mortgage is another type of variable rate mortgage, but it has an interest rate ceiling or cap. This means it guarantees your mortgage rate won’t go above a certain level, making it a good option when interest rates overall are on the rise. However, there are barely any capped mortgages on the market and the cap usually only lasts for a period of two to five years. Capped rate mortgages also tend to be more expensive than trackers and discounted rates.
Your rate and monthly payments stay the same for the whole deal.
Deals usually last two, three or five years, but some run to 10. Fixed rates can start higher than variable ones. In return, you're protected if rates rise, and you know what you'll pay each month.
The lender can change your rate whenever it wants. It doesn't have to follow the Bank of England base rate. Your monthly payments can go up or down, so build that into your budget.
A tracker mortgage follows another rate, usually the Bank of England base rate. If the base rate falls, your payments fall. If it rises, they rise. Some trackers have a floor, which means your rate won't drop below a set level, even if the base rate does.
A discounted mortgage is where the interest rate is pegged at a set amount below your lender’s standard variable rate (SVR), typically for a term of two or five years. For example, if your mortgage offers a 1.5% discount and the SVR is 5%, your interest rate would be 3.5%. This means your mortgage rate will rise and fall by the same amount as your lender’s SVR.
A capped rate mortgage is another type of variable rate mortgage, but it has an interest rate ceiling or cap. This means it guarantees your mortgage rate won’t go above a certain level, making it a good option when interest rates overall are on the rise. However, there are barely any capped mortgages on the market and the cap usually only lasts for a period of two to five years. Capped rate mortgages also tend to be more expensive than trackers and discounted rates.
Every lender has its own rules. They all want to know you can afford the repayments. Most will look at:
Your income, and proof of it
Your regular spending, such as bills and commuting
What you owe on credit cards, loans and car finance
Your credit record
Where your deposit comes from
It can be, depending on your situation. Rates are usually cheaper than on a smaller deposit, and you borrow less. The trade-off is that you need to save 25% first.
Work out what you earn and what you spend each month. Then compare that with the repayments you'd expect to make. You can find out more in our how much it costs to buy a home guide.
It depends on the lender and your other costs. As an example, say you want to buy a £300,000 home. A 75% LTV mortgage is £225,000. If a lender lends 4.5 times your income, you'd need to earn about £50,000. At 4 times, you'd need about £56,250. Some lenders lend more and some less.
Taking steps such as setting a budget and making cutbacks where possible can help you to save up a 25% deposit. Read our guide for more information on how to save up for a deposit.
With 75% LTV, you need a 25% deposit. With 80%, you need 20%. Lenders often price the two in different bands, so the same lender may offer different rates at each. See our 80% LTV mortgages page.
Yes. Lenders want to know you'll keep up with repayments. If your credit score is low, you may find it harder to get accepted. Find out why your credit score matters.
Use the links below to find out about other mortgages
