Mortgages for buyers and homeowners with large deposits may be getting cheaper, following Yorkshire Building Society's decision to cut the rates on its two-year fixed-rate deal at a 65% loan-to-value (LTV) ratio.
Under the the deal, first-time buyers and home movers having a deposit of at least 35% can lock in an interest rate of just 1.46% for two years.
But are you able to get a cheaper type of loan if you’ve got an even bigger deposit? And just what about if you’re remortgaging your current property? Here, we look at the best deals at 50-65% LTV, plus how the market differs if you’re borrowing a lot more than lb1m.
What counts like a large-deposit mortgage?
Large deposits are usually considered to be those covering 35% or more of the property’s value, meaning you’d need a mortgage in an LTV (loan-to-value) ratio of 65% or less.
But does having a bigger deposit mean you’ll obtain a a lot better deal?
Generally, the greater money you can put down as a portion of the property value, the lower the eye rate you’ll pay.
However, recent months have seen fierce competition between lenders to inspire first-time buyers with small deposits to enter the marketplace. So, if you’re saving for your first property, accumulating a significantly larger deposit may not always repay.
Cheapest home loan rates at 50%, 60% and 65% LTV
In the current market, most people are taking out fixed-rate mortgages for two or 5 years.
We’ve recently identified that two-year rates are on the rise, with the gap closing between two and five-year deals, but it is still possible to obtain a good deal for terms.
The average minute rates are currently 2.49% for a two-year fix and 2.9% for 5 years. But if you’ve got a large deposit you’ll have the ability to pay considerably less.
The tables below show the best introductory rates at 50%, 60% and 65% LTV. Links get you to the reviews of each lender.
Two-year fixed-rate deals
| Max LTV | Lender | Initial rate | Revert rate | APRC | Fees | Available to | Loan size |
| 50% | Coventry Building Society | 1.55% | 4.99% | 4.4% | lb999 | First-time buyers, home movers, remortgagers | Up to lb2m |
| 60% | Halifax | 1.4% | 4.24% | 4% | lb1,495 | First-time buyers | lb250,000 – lb1m |
| 65% | Yorkshire Building Society | 1.46% | 4.25% | 4.2% | lb995 | First-time buyers, home movers | lb25,000 – lb500,000 |
Source: Moneyfacts. Correct 21 February 2022.
Bucking the trend that the bigger deposit gets you a rate plan, the top rates available at both 60% and 65% LTV beat that offered by the cheapest deal at 50% LTV.
However, this may be because of the fact that there’s much less competition between lenders over 50% LTV mortgages. Actually, there are only seven two-year mortgage handles maximum LTVs of 50%, in contrast to 38 deals at 65%, and 113 products at 60% LTV.
It’s worth noting that, while the Halifax mortgage provides an attractive deal, there are a few caveats. It is only available to first-time buyers. And, due to the loan size restrictions, to get this mortgage at 60% LTV, you should buy a house worth at least lb417,000.
Five-year fixed-rate deals
| Max LTV | Lender | Initial rate | Revert rate | APRC | Fees | Available to | Loan size |
| 50% | Coventry Building Society | 1.99% | 4.74% | 3.8% | lb999 | First-time buyers, home movers, remortgagers | Up to lb2m |
| 60% | Halifax | 1.79% | 4.24% | 3.6% | lb1,495 | First-time buyers | lb250,000 – lb1m |
| 65% | Principality Building Society | 1.9% | 5.05% | 3.9% | lb1,395 | First-time buyers, home movers, remortgagers | lb5,000 – lb750,000 |
Source: Moneyfacts. Correct 21 February 2022.
There are comparatively fewer five-year deals for large deposits: seven at 50% LTV, 96 at 60% and 30 at 65%.
Again, the 60% and 65% deals beat the rate provided by the very best 50% deal, which means you won’t necessarily find cheaper rates for those who have a larger deposit.
The Coventry Building Society deal does have the advantage of offering loans as high as lb2m – twice those of Halifax. However, if you’re borrowing a lot more than lb1m, you may find the mortgages within the section below offer less expensive.
Note the Halifax deal, again, is just for first-time buyers, and has exactly the same minimum loan restriction.
Large deposits for premium properties
If you've got a large deposit to put down, however, you also need to borrow a lot of money for any premium property, the mortgages available can start to look quite different.
A few 60% LTV deals can be found, plus some come with surprisingly reduced rates.
Halifax provides a two-year fixed-rate mortgage to first-time buyers and home movers borrowing between lb1m and lb5m. The deal has an initial rate of just one.48%, reverting to 4.24%. There’s an arrangement fee of lb1,495 and an overall APRC of three.8%.
As the deal is available at 60% LTV, the property you had been buying would need to cost at least lb1.67m.
The same applies to the very best five-year rate for all those borrowing lb1m-lb3m, which is offered by Skipton Building Society at 1.99%.
The mortgage has a completion fee of lb995 and reversion rate of 4.99%, giving a 3.8% APRC.
Skipton’s deal can be obtained to people remortgaging their current home, as well as first-time buyers and home movers.
