What is a 50% LTV mortgage?
Whilst many borrowers tend to require a mortgage with a higher loan to value (LTV), there are mortgages available that enable you to borrow half of your property’s value, which can often give borrowers access to better interest rates. A lot of mortgage products for borrowers with a 50% deposit tend to be as a two-year fixed-rate deal meaning that all monthly repayments on your mortgage will be set for two years. At the end of this term you will be free to compare again for a better offer from the same lender or to shop around for offers from other UK suppliers.
What are the advantages of a 50% LTV mortgage?
A 50% LTV mortgage allows you to search more mortgage options than other higher LTV rates as providing a deposit of 50% gives you access to mortgages that are otherwise unavailable.
With fixed monthly payments, homeowners will know exactly how much they should be paying each month, making it easier for them to budget and plan for when their fixed-term comes to an end. At this point, they either switch to the standard variable rate (SVR) or can compare other options.
What are the disadvantages of a 50% LTV mortgage?
Fixed rates will give homeowners the peace of mind of secure monthly payments that won’t deviate but this also means that if interest rates fall or the Bank of England changes the base rate then they could end up paying more per month than they need to be.
How do I figure out how much equity is in my home?
In order to borrow half of what your home is worth a mortgage company will need to know the exact equity of the property. To apply for a 50% LTV mortgage you must find out how much you home is worth. You can do this by asking the lender to give you an estimation, or you can have your home professionally valued in order to establish the correct value.
Lenders tend to give an estimate lower than the actual value so always consider whether having your home professionally valued will be more beneficial in the long run with an accurate reading.
How do I choose the right 50% LTV mortgage?
Comparing mortgages enables you to see important information such as any booking fees required to reserve the mortgage, completion fees, that some lenders charge upon finalising your deal or early redemption charges should you want to pay off your remaining mortgage early.
Compare 50% LTV mortgages
Compare 50% loan to value mortgages with our partners at Mojo Mortgages using the button below. Check your eligibility & benefit from a fee-free mortgage broker service when you apply below.