A 100% loan-to-value (LTV) mortgage is a type of mortgage where the borrower is able to finance the entire purchase price of a property without needing to provide a down payment.
The mortgage covers the full value of the property, allowing borrowers to secure a home loan without having to save for a down payment.
100% LTV mortgages are less common and may have specific eligibility requirements and potentially higher interest rates compared to mortgages with a lower LTV ratio.
100% LTV mortgages are unique in that there is no deposit or down payment necessary. However, there may be other costs to factor in such as:.
Mortgage Type |
Features |
100% LTV Fixed Rate |
Offers a fixed interest rate for a specified term
|
100% LTV Variable Rate |
Interest rate can fluctuate based on market conditions
|
100% LTV Offset |
Allows you to offset your mortgage balance with savings in a linked account, reducing the interest paid
|
100% LTV Guarantor |
Requires a guarantor, such as a family member, to provide additional security for the loan
|
100% LTV Shared Equity |
Involves a shared ownership scheme, where you purchase a portion of the property and pay rent on the remaining share
|
At Deedle, we understand the anxieties that come with buying a property. Our committed team of mortgage advisors will guide you through the entire process, from the initial consultation to mortgage completion. We handle paperwork, communicate with lenders, and ensure a seamless experience, saving you time, stress, and effort.
Whether you have a less-than-perfect credit history, are self-employed, or in retirement, our team of experts is here to help you find the mortgage that fits your needs. With our extensive industry experience, we diligently search through numerous mortgage deals to find the right one for your specific circumstances and requirements.
Assuming you are purchasing a property valued at £250,000, with an interest rate of 3.5% per annum and a loan term of 25 years, the monthly payment for this scenario would be approximately £1,245.22.
However, if you are purchasing the same with the same loan term, but with an interest rate of 6.01% per annum, the monthly payment for this scenario would be approximately £1,640.75.
Remortgaging from a 100% LTV mortgage is possible once you have built up equity in your property. As you make repayments and the property value potentially increases, your loan-to-value ratio decreases. This can provide an opportunity to remortgage to a lower LTV and potentially secure more favourable interest rates. However, it might be best to check with a professional mortgage advisor.
The main advantage of a 100% LTV mortgage is that it allows you to purchase a property without the need for a deposit. This can be especially beneficial for first-time buyers who may not have substantial savings for a deposit. It enables you to get onto the property ladder sooner and avoid the time-consuming process of saving for a deposit.
Yes. These include options such as saving for a deposit to lower the loan-to-value ratio (such as 70%, 80% or 90% LTV), seeking financial assistance from family or using a guarantor, or exploring government schemes designed to assist first-time buyers.
If you opt for something like a 95% LTV mortgage, you will not need to save up for too long, and you have a higher likelihood of getting approved.
While a 100% LTV mortgage offers the benefit of not needing a deposit, there are some drawbacks to consider. Interest rates for these mortgages tend to be higher compared to lower LTV mortgages. The lack of a deposit also means you will have a higher loan amount, resulting in larger monthly repayments and potentially higher long-term interest costs.
Securing a 100% LTV mortgage with bad credit can be challenging. Lenders typically assess the creditworthiness of borrowers, and a poor credit history may limit the options available to you. However, some specialist lenders may consider applications from individuals with adverse credit, although the interest rates offered are likely to be higher. Although you should definitely make steps to improve your credit score before applying, Deedle considers people with all types of credit scores.
Qualifying for a 100% LTV mortgage typically requires meeting certain criteria set by the lender. Some factors that lenders consider include credit history, income stability, employment status, and affordability assessments. Demonstrating a strong financial profile and having a good credit score can improve your chances of qualifying for this type of mortgage.
Yes. It’s possible to get 100% LTV mortgages in all areas of the UK, including London, Birmingham, Manchester, Leeds, Glasgow, Liverpool, Newcastle, Sheffield, Bristol, Edinburgh, Cardiff, Nottingham, Southampton, Belfast, Aberdeen, Leicester, Coventry, Brighton, and Plymouth.
A 100% LTV mortgage means you will be borrowing the entire purchase price of the property, resulting in higher loan repayments compared to mortgages with a lower loan-to-value ratio. Since there is no deposit to offset the loan amount, your monthly payments will be higher, considering the larger principal amount and potentially higher interest rates associated with these mortgages.
