Mortgage deals under 50%LTV

NorfolkCanary

Happy Wednesday!

This is more for having info. ready, however my current 5 year mortgage ends next June / July, expecting to leave me a few percent under 50% LTV.

Having done some light searching around there doesn't seem to be any (many?) specific deals for this bracket, lowest typical mainstream I can find with Natwest / NW etc appear to be typically 60%.

Wouild a broker have access to 'more preferable' deals than myself, or am I asking for the impossible?

Thank you!

Exodi

I think because it's quite niche, I would expect that even if you could find 50% deals, they are likely to be just as, if not less competitive, than the current 60% deals by mainstream lenders.

But to avoid giving a non-answer - probably the easiest way to find out would be to use the Mortgage broker AMA thread (it's in this board, usually on the first page, has ~8.4k comments).

The reason I don't think you'll get much more competitive is just my interpretation of why LTV brackets are priced as they are. If we take a theoretical 100% LTV mortgage (e.g. there is no equity in the property), if the house is repossessed and auctioned, especially if the house value goes down at all, the property could be in negative equity aka a loss for the lender. Given there is no equity 'cushion', the chances of this are relatively high hence the interest rate is highest to price in this risk.

If we take a 60% LTV mortgage, if the house is repossessed and auctioned, even if house prices have also gone down, there is a 40% equity cushion to protect the lender against loss. Properties values going down this much is unfathomable by most, hence why this is usually the lowest LTV - there is effectively no risk the lender will not be reimbursed in full.

That's why I don't think sub 60% mortgages exist (or at least in the mainstream), the chance of loss for a lender on a 10% LTV mortgage is probably identical to the chance of loss on a 60% LTV mortgage.

ACG

To be honest, the lenders who do offer sub 50% LTV deals are not going to be mainstream. So the chances of them being cheaper than 60% LTV from mainstream lenders is going to be slim.