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Top mortgage deals for buyers with big deposits

Four in ten London buyers have a deposit of 60% or more

Four in ten people buying a London property in May did so with a deposit of at least 60%, according to new research.

Data from chartered surveyor e.surv’s Mortgage Monitor report shows a significant deposit divide in the capital, with only 14% of London buyers using small deposits.

Here, we take a look at where the highest proportion of buyers have big deposits, and run through some of the best rates available to buyers with cash in their pockets.

  • If you need help understanding your mortgage options, you can get impartial, expert advice by calling Which? Mortgage Advisers on 0800 197 8461.

Where do people have the largest deposits?

The research by e.surv shows that London and the South East have the highest proportion of homebuyers with large deposits – even though property prices in these areas also tend to be higher than the rest of the UK.

For the purposes of this table, ‘small deposit lending’ encompasses deposits of up to 15%, while ‘large deposit lending’ are those over 40%.

Region Large deposit lending Small deposit lending
London 40% 13.8%
South East 38.2% 18.9%
Eastern England 35.7% 20.8%
South/South Wales 34.8% 20.8%
Northern Ireland 32.8% 35.7%
Scotland 32.7% 21.9%
Midlands 27.2% 27.4%
Yorkshire 24% 32.6%
North West 23.5% 32.1%

At the other end of the scale, more than a third of homes in Northern Ireland go to borrowers with small deposits.

But does a big deposit mean a significantly better deal? As a rule of thumb, the more money you can put down as a portion of the property value – known as the loan-to-value ratio or LTV – the lower the interest rate the lender will charge you.

Below, we look at the best-available deals for buyers with deposits of more than 25% of the property value.


Best fixed-rate deals

Fixed-rate mortgages are very popular with homebuyers, as they offer protection against interest rate rises for a set period of time – usually two, three or five years.

In the last couple of years, there has been a great deal of competition in the two-year market, which has resulted in very low rates for buyers and people remortgaging.

The table below shows the best deals currently available on two and five-year terms based on their initial rate.

Two-year fixed-rate deals

Lender Initial rate Revert rate APRC Max LTV Fees Remortgage only?
Santander 1.29% 3.75% (3.25% + base rate) 3.5% 75% £1,999 No
Yorkshire Building Society 1.36% 4.99% 4.5% 75% £1,495 No
Halifax 1.43% 3.99% (3.49% + base rate) 3.6% 60% £1,495 No

Five-year fixed-rate deals

Lender Initial rate Revert rate APRC Max LTV Fees Remortgage only?
Skipton 1.83% 4.74% 3.6% 60% £1,995 No
HSBC 1.84% 3.94% 3.1% 60% £1,499 No
Lloyds Bank 1.84% 3.99% 3.1% 50% £1,495 Yes

Best variable-rate deals

While fixed-rate products are by far the most popular type of mortgage, there are some attractive discount and tracker deals out there for buyers with a higher appetite for risk.

Two-year discount deals

Discount mortgages offer a set reduction on the lender’s standard variable rate (SVR) for a set amount of time. For example, if the bank’s SVR is 5% and the discount is 4%, you’ll pay a rate of 1% on your mortgage during this period.

While this might sound cheap on paper, if the lender’s SVR increases (for example due to the Bank of England base rate rising), then you’re likely to face higher costs.

In the two-year market, the table topping discount deals offer rates of less than 1% – well below those available on the other popular type of variable product, the tracker mortgage.

Lender Initial rate Discount Revert rate APRC Max LTV Fees
Yorkshire Building Society 0.97% 4.02% 4.99% 4.4% 65% £1,495
Clydesdale Bank 0.99% 3.96% 4.95% 4.3% 60% £1,449
Monmouthshire 0.99% 4% 4.99% 4.4% 80% £2,149

Five-year discount deals

Lender Initial rate Discount Revert rate APRC Max LTV Fees
Newbury 1.74% 2.46% 4.2% 3.5% 75% £600/£850
Leeds 1.80% 3.89% 5.69% 4.4% 80% £499

Five-year tracker deals

In the five year market, however, tracker mortgages are priced almost as cheaply as discount deals.

Tracker mortgages follow the Bank of England base rate plus a set percentage. So if your rate is 1.5% and the base rate is 0.5%, you’ll pay 2%.

Tracker deals are attractive at the moment, but with speculation over the base rate increasing over the next few months, it’s doubtful that they’ll be able to keep up with fixed-rate deals.

Lender Initial rate Tracker Revert rate APRC Max LTV Fees
Nationwide 1.89% 1.39% + base rate 3.99% 3.1% 60% £999
Barclays 1.99% 1.49% + base rate 3.49% + base rate 3.4% 75% £1,999

Note: All mortgage data in this article is sourced from Moneyfacts, accessed 20 June 2018.  Some products are only available either through mortgage brokers or directly from a lender.

Finding the best mortgage deal: top tips

When it comes to finding the best mortgage deal, research is key, so it’s worth taking the following steps.

  • Don’t just look at the initial rate. While headline-grabbing rates might seem tempting, the devil is often in the detail. Consider the overall cost of the mortgage by looking at the APRC, and factor in any additional costs. Products with the best rates often come with large flat fees, as you can see in the tables above.
  • Think carefully before tying yourself in. Long-term fixes may seem safe, but what if you decide to move house in a couple of years? Before selecting a mortgage, check that it can be ported to another property and look at any early repayment charges (ERCs) that can add a hefty chunk to your overall bill.
  • Read customer reviews. A mortgage is a big commitment, so you’ll want to ensure you’re with a provider you can trust. Take a look at our mortgage lender reviews section to see how the major banks and building societies fared in our survey.

Learn more in our full guide on finding the best mortgage deal.

How to find good mortgage advice

If you need some help understanding your mortgage options, you can fill out the form below for a free call back from Which? Mortgage Advisers.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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