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26 Feb 2019

Large-deposit mortgages: we reveal the best remortgaging and home-buyer deals

Discover the cheapest mortgage rates at 65%, 60% and 50% loan-to-value ratios

Mortgages for buyers and homeowners with large deposits might 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 terms of the deal, first-time buyers and home movers with a deposit of at least 35% can lock in a rate of just 1.46% for two years.

But can you get a cheaper mortgage rate if you've got an even bigger deposit? And 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 more than £1m.

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What counts as a large-deposit mortgage?

Large deposits are usually considered to be those covering 35% or more of the property's value, meaning you'd require a mortgage at an LTV (loan-to-value) ratio of 65% or less.

But does having a bigger deposit mean you'll get a significantly better deal?

Generally, the more money you can put down as a portion of the property value, the lower the interest rate you'll be charged.

However, recent months have seen fierce competition between lenders to encourage first-time buyers with small deposits to enter the market. So, if you're saving for your first property, building up a much larger deposit may not always pay off.

  • Find out more:LTV calculator- what LTV will you need on your mortgage?

Cheapest mortgage rates at 50%, 60% and 65% LTV

In the current market, most people are taking out fixed-rate mortgages for two or five 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 get a good deal for both terms.

The average rates are currently 2.49% for a two-year fix and 2.9% for five years. But if you've got a large deposit you'll be able to pay considerably less.

The tables below show the best introductory rates at 50%, 60% and 65% LTV. Links take you to our reviews of each lender.

Two-year fixed-rate deals

Max LTVLenderInitial rateRevert rateAPRCFeesAvailable toLoan size
50%Coventry Building Society1.55%4.99%4.4%£999First-time buyers, home movers, remortgagersUp to £2m
60%Halifax1.4%4.24%4%£1,495First-time buyers£250,000 - £1m
65%Yorkshire Building Society1.46%4.25%4.2%£995First-time buyers, home movers£25,000 - £500,000

Source: Moneyfacts. Correct 21 February 2019.

Bucking the trend that a bigger deposit gets you a better rate, the top rates on offer at both 60% and 65% LTV beat that offered by the cheapest deal at 50% LTV.

However, this may be due to the fact that there's much less competition between lenders over 50% LTV mortgages. In fact, there are currently only seven two-year mortgage deals with maximum LTVs of 50%, compared with 38 deals at 65%, and 113 products at 60% LTV.

It's worth noting that, while the Halifax mortgage offers an attractive deal, there are a few caveats. It is only available tofirst-time buyers. And, due to the loan size restrictions, to take out this mortgage at 60% LTV, you would need to be buying a home worth at least £417,000.

Five-year fixed-rate deals

Max LTVLenderInitial rateRevert rateAPRCFeesAvailable toLoan size
50%Coventry Building Society1.99%4.74%3.8%£999First-time buyers, home movers, remortgagersUp to £2m
60%Halifax1.79%4.24%3.6%£1,495First-time buyers£250,000 - £1m
65%Principality Building Society1.9%5.05%3.9%£1,395First-time buyers, home movers, remortgagers£5,000 - £750,000

Source: Moneyfacts. Correct 21 February 2019.

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 offered by the top 50% deal, so you won't necessarily find cheaper rates if you have a bigger deposit.

The Coventry Building Society deal does have the advantage of offering loans of up to £2m - twice that of Halifax. However, if you're borrowing more than £1m, you may find that the mortgages in the section below offer better value.

Note that the Halifax deal, again, is only for first-time buyers, and has the same minimum loan restriction.

Large deposits for premium properties

If you have a large deposit to put down, but you also need to borrow a lot of money for a premium property, the mortgages available can start to look quite different.

A few 60% LTV deals are available, and some come with surprisingly low rates.

Halifaxoffers a two-year fixed-rate mortgage to first-time buyers and home movers borrowing between £1m and £5m.The deal has an initial rate of 1.48%, reverting to 4.24%. There's an arrangement fee of £1,495 and an overall APRC of 3.8%.

As the deal is available at 60% LTV, the property you were buying would need to cost at least £1.67m.

The same applies to the best five-year rate for those borrowing £1m-£3m, which is available fromSkipton Building Society at 1.99%.

The mortgage comes with acompletion fee of £995 and reversion rate of 4.99%, giving a 3.8% APRC.

Skipton's deal is available to people remortgaging their current home, as well as first-time buyers and home movers.