Higher mortgage deposits start at around 25% of the property value.
But does having a bigger deposit mean you will get a better deal? Do you still need to provide loads of paperwork and information?
Having a high deposit will certainly give you access to some better rates and make you more attractive to lenders.
In this guide we explain what a large deposit is, how your deposit affects the deals and interest rates, and how a broker can help you secure a great deal.
What is a high deposit mortgage?
Lenders base their mortgage deals around loan to value (LTV). This is a percentage figure that represents risk to a lender.
The lower the LTV percentage, the lower the risk.
A deposit of 25% or more would be considered a large deposit. This requires a 75% LTV mortgage, which is low risk.
At 75% and below you will start to see some really competitive deals.
25% deposit
Once you get to the 25% level, mortgage rates get much more competitive. It’s the point where lenders feel a bit more relaxed about the risk of lending.
You will find it easier to access a 75% mortgage and there will be lots to choose from.
These benefits will apply equally to first time buyers, home movers and those needing to remortgage.
50% deposit
At 50% deposit you will be viewed as low risk and will have access to the best rates.
It’s fair to say that very few first-time buyers have a 50% deposit. You’re more likely to be someone who has owned property for a while and built up the equity over time.
75% deposit
Having a 75% deposit or 75% equity means that you shouldn’t have too much difficulty in securing a new mortgage.
Again, you will be able to pick from the best deals.
What’s the largest deposit you can have?
The largest deposit would be 100% of the purchase price. Making you a cash buyer who does not need a mortgage.
Having a very large deposit is normally a good thing. But the flip side is that you only need a small mortgage.
Just be aware that a number of lenders do have a minimum loan size for new applications. This is around £50,000.
And the smallest?
True 100% mortgages are no longer available, although there are some ways to get a mortgage with no deposit.
Percentage wise the smallest deposit would be 5%, based on a 95% LTV mortgage.
You will find more useful information in our article: How to get a mortgage with a low deposit
Work out your LTV
Lenders and brokers will refer to your deposit as a percentage. 25%, 50% and so on.
Once you know your deposit amount and the price of the property then you can work out the loan to value, or LTV.
The higher the deposit, the lower the LTV.
A deposit of £100,000 on a property that costs £400,000 would have a 75% LTV and 25% deposit.
You can use our LTV calculator to do this for you.
If you find that your LTV comes to 76% for example. You might enquire about the deals available at 75%.
It could be well worth chipping in with some extra cash to get a cheaper mortgage based on the lower percentage.
You will find more useful information in our article: What does loan to value mean?
LTV Calculator
This simple calculator will quickly work out your loan to value (LTV) percentage. Just enter the property value, or purchase price, and the mortgage amount you need.
Is it easier to get a mortgage?
Having a larger deposit will always provide advantages and benefits.
So it probably makes it a little easier to get a mortgage.
To be eligible for a high-deposit mortgage, you’ll still have to meet the lender’s criteria, as well as having the cash deposit needed.
Eligibility rules apply to all mortgages, whether you have a low deposit or a high deposit.
Credit status
All borrowers will be credit checked by the lender. Some lenders are OK with a less than perfect credit file, while others need it to be squeaky clean. It's a good idea to check your credit report before you apply.
Does affordability still apply?
Yes, the affordability rules will still apply, even though you have a large deposit.
The lender always needs to check that you have sufficient income to maintain the monthly repayments.
With a large deposit you will be borrowing a low LTV, which is a lower risk for the lender. But even then, you still need enough money each month to cover the costs.
Theoretically, you could have a super low LTV but be declined on the basis of affordability.
Lenders will always check your credit file and credit score. If you do have some bad credit in the past then some lenders may be happy to overlook this, providing everything else stacks up.
Also, if the mortgage term goes beyond age 65 the lender will need to make some additional checks. This is called borrowing into retirement, and they will ask about your earnings past age 65.
Guide to Deposits
Our guide explains what a mortgage deposit is and how it affects your mortgage choices.
Applying for a mortgage
We explain what happens at each step, including what documents are needed and how a broker can help.
Large deposits and large mortgages
A large deposit might bring your LTV down, but what if you still needed a large mortgage?
Many of the high street lenders will offer maximum mortgages of between £1 – £5 million with differing loan to values (LTV).
If you need to borrow more than £1 million upto 60% LTV then there's likely to be a few lenders courting your business, with special rates.
When you borrow more than £1 million you could probably benefit from a more premium service.
In our experience, sophisticated borrowers can benefit from a more personalised service when the loan size exceeds £1m. In theory there is no maximum loan and our high-net-worth broker team can comfortably source bespoke mortgages of £5m, £25m and above.
Learn more about Large Mortgage Loans
How a broker can help
Searching for a mortgage when you have a large deposit is still going to be time consuming.
While some lenders might say they offer 75% mortgages, the devil is in the detail. And they may have conditions or restrictions that effectively exclude you from applying.
By using a whole of market mortgage broker, they can do all of this for you.
Searching for deals and reading the small print. Calling the lenders to double check lending criteria.
Brokers have access to over 100 mortgage lenders, both the well-known high street banks and the specialist companies.
This means you benefit from having the widest possible choice of lenders and mortgage deals. Occasionally, there's exclusive rates or room for negotiation when your deposit is large enough.
Respect Mortgages offers a free broker matching service. We can introduce you to an independent mortgage expert who knows about high deposit mortgages.
