What happens when your LTV goes below 60%? 

Quick summary:

• Most mortgage lenders offer their best interest rates to those with 60% loan-to-value or below

• You’ll still be able to get a mortgage with a 60% LTV or lower - but you’re unlikely to see much difference in the rates on offer

• A mortgage broker can help you find the most suitable lender match for your circumstances

Why 60% LTV is a key threshold for mortgages

Your loan-to-value ratio (the size of your mortgage compared to the value of your property) is one of the ways lenders assess your risk. A lower LTV means you're borrowing less and have more of your own money in the property. This makes you a much safer bet for the lender, because the risk of them losing money if you can’t repay your mortgage is very small. 

Lenders tend to group their mortgage deals into LTV bands, often in 5% increments (like 95%, 90%, 85% and so on). Interest rates tend to decrease as your LTV lowers, with the best rates usually reserved for those with a LTV of 60% or less. 

Interest rates are unlikely to decrease beyond the 60% LTV threshold, so think of 60% as the point where you’ve gained access to the top tier of mortgage deals. That’s because lenders have found that once your LTV hits 60%, the risk doesn’t drop much further for them no matter how much more money you put into the property. So they don’t tend to create separate, cheaper mortgage products for lower LTVs. 

Whether you’ve got a 45% LTV or a 20% LTV, you’ll generally be offered the same rates as someone with a 60% LTV.

The benefits of being a low LTV borrower

Having a loan-to-value below 60% puts you in a great position when buying a home or remortgaging. 

• You could get access to the most competitive rates.

• Choose from a potentially wider range of lenders. 

• It could boost your borrowing power. 

Essentially, having more equity in your home is almost always a good thing. It gives you security, choice and potentially access to a wider range of mortgage deals. 

What is the lowest loan-to-value mortgage?

While there is technically no minimum loan-to-value ratio, the lender’s own minimum loan size may impact you. If the amount you need to borrow is less than the lender’s minimum, they won’t typically offer you a mortgage. 

For example:

• You want to buy a house for £400,000

• You have a deposit (or equity build-up) of £380,000 

• You only need to borrow £20,000, giving you a low LTV of just 5% 

• Lenders with a minimum loan size of £25,000 may not be able to help, and you’d need to consider other alternative options

*Correct at the time of writing, 29th September 2025

Is your mortgage balance too small to get a mortgage or remortgage?

You have a few options including:

• Compare terms across different lenders. A broker can help you to assess your options, as each lender will have their own minimum loan size.

• Automatically switch to your lender’s standard variable rate (SVR) when your current deal ends. 

• Borrow a little more to secure a lower interest rate. Borrowing extra money always comes with its own risks to weigh up, but you could even choose to pay back the extra money straightaway (though always check for any overpayment penalties first). 

• Consider other ways of borrowing. For a very small amount (typically under £25,000), it could be worth comparing your mortgage options with the cost of a personal loan. While the interest rate might be higher, the total cost over a short period of time could sometimes work out cheaper than staying on a lender’s SVR.