Remortgage at 70% LTV

What Rates Can You Expect at 70% LTV?

At 70% LTV, you sit in one of the more favourable rate brackets in the UK mortgage market. While the absolute best rates are typically reserved for borrowers at 60% LTV or below, the difference between 60% and 70% LTV rates is generally quite modest, often just 0.05% to 0.15% on equivalent deals.

This means that while you are not quite at the optimum level, you are still accessing rates that are significantly better than those available to borrowers at 75%, 80%, 85%, or 90% LTV. The pricing steps between LTV brackets tend to be largest at the higher end, so the difference between 70% and 90% LTV is far more substantial than the difference between 60% and 70%.

Here is what you can typically expect at 70% LTV across different product types:

• 2 year fixed rates — Among the most competitive on the market, usually very close to the best 60% LTV rates. This is a popular choice for borrowers who want short-term certainty and plan to reassess in two years.
• 5 year fixed rates — Highly competitive at 70% LTV, with a wide range of lenders competing for your business. The gap between 60% and 70% LTV is typically very narrow on 5 year fixes.
• Tracker rates — Good tracker margins are available at 70% LTV, giving you the option to benefit from potential base rate reductions while maintaining a reasonable equity buffer.
• 10 year fixed rates — Available from a growing number of lenders at 70% LTV, offering long-term payment stability at rates that are close to the best on the market.

The exact rates available to you will depend on the lender, the product type, your credit history, and the overall market conditions at the time you apply. Rates change regularly, so checking the latest offerings through a broker is the best way to see what is currently available.

How 70% LTV Compares to Other LTV Brackets

Understanding where 70% LTV sits in relation to other common LTV brackets helps you appreciate the value of your equity position and whether it might be worth trying to improve your LTV before remortgaging.

70% vs 60% LTV

The rate difference between these two brackets is typically the smallest of any adjacent LTV steps. Many lenders offer identical or near-identical rates at both levels. The practical difference on a typical mortgage might be just a few pounds per month, making 70% LTV an excellent position to be in without needing to stretch to reach 60%.

70% vs 75% LTV

The 75% LTV bracket is another popular threshold, and here the rate step can be slightly more noticeable. Lenders tend to view 75% as a significant boundary, and the rate increase from 70% to 75% is often larger than the increase from 60% to 70%. If you are between these two levels, the savings from reaching 70% can be worthwhile.

70% vs 80% LTV

The jump from 70% to 80% LTV typically brings a more meaningful increase in rate. At 80%, the lender is providing more of the property's value, and the risk premium is reflected in higher pricing. The difference can be 0.2% to 0.4% or more on equivalent deals, which translates to noticeable savings on your monthly payments.

70% vs 90% LTV

The difference between 70% and 90% LTV rates is usually the most substantial, often 0.5% to 1% or more. At 90% LTV, lenders are providing nine-tenths of the property value, and the risk is priced accordingly. Borrowers at 70% LTV enjoy considerably better rates and a much wider choice of deals.

If you are in the 70% LTV bracket, you can feel confident that you are accessing rates that represent excellent value. The question of whether to push for 60% LTV depends on how close you are and whether the modest rate improvement justifies the effort or cost of reducing your balance further.

Building Equity to Improve Your LTV Position

If you are currently at 70% LTV and want to work towards an even better rate bracket in the future, there are several strategies you can employ to build equity and reduce your LTV over time.

Regular mortgage repayments

If you are on a repayment mortgage, your balance decreases with every monthly payment. Over the course of a typical fixed-rate deal, your LTV will naturally improve as you pay down the capital. This organic reduction, combined with any property value growth, can move you into a lower LTV bracket by the time you next remortgage.

Overpayments

Most mortgage deals allow you to overpay by up to 10% of the outstanding balance each year without incurring early repayment charges. Regular overpayments, even modest ones, can significantly reduce your balance over time. For example, overpaying by just one hundred pounds per month over five years would reduce your mortgage by six thousand pounds plus the compound interest saved.

Property value growth

If your property increases in value, your LTV improves automatically without you needing to reduce your mortgage balance. While property prices are not guaranteed to rise, historical trends in most areas of the UK have shown long-term growth. Of course, this is not something you can control, and short-term fluctuations can work against you.

Value-adding improvements

Strategic home improvements can increase your property's value and accelerate your journey to a lower LTV bracket. Extensions, loft conversions, and high-quality kitchen and bathroom renovations are typically the most effective value-adding improvements. However, it is important to research whether the potential value increase justifies the cost of the work.

Lump sum payments

If you receive a bonus, inheritance, or other windfall, using some of it to reduce your mortgage balance can have a lasting benefit by moving you into a lower LTV bracket. Even a relatively modest lump sum can make the difference if you are close to an LTV threshold.

A mortgage adviser can help you calculate the potential impact of these strategies on your LTV and the rates you could access at your next remortgage.

Choosing the Best Remortgage Deal at 70% LTV

With a healthy 30% equity stake, you have access to a broad range of competitive remortgage deals. Here is how to select the one that offers the best overall value for your individual situation.

Consider your priorities

Before comparing rates, think about what matters most to you. Is it the lowest possible monthly payment? The shortest possible tie-in period? Maximum flexibility to make overpayments? Long-term rate certainty? Your priorities will guide your choice of product type and deal structure.

Calculate the true cost

Never judge a remortgage deal solely on the headline interest rate. Calculate the total cost over the deal period, including arrangement fees, any valuation fees not covered by the lender, and legal costs if not included in the package. A deal with a rate of 4.2% and no fee can work out cheaper than a deal at 4.0% with a one thousand five hundred pound arrangement fee, depending on the mortgage amount and deal length.

Check early repayment terms

If there is any possibility you might need to leave the deal early, perhaps to move home or to take advantage of better rates, the early repayment charge structure is crucial. Some deals have flat ERCs throughout, while others reduce each year. A few products, particularly certain tracker deals, have no ERCs at all.

Look at overpayment allowances

The standard overpayment allowance is 10% of the balance per year, but some lenders offer more generous terms. If you anticipate wanting to make significant overpayments, check this before committing.

Assess the lender's service

The rate is important, but so is the quality of the lender's service. Consider factors such as application processing times, the quality of their online portal, and their reputation for customer service. A slightly better rate from a lender with poor service can lead to a frustrating experience throughout the life of the deal.

Get professional advice

A whole-of-market mortgage broker can compare hundreds of deals and identify the best options for your circumstances. They will also manage the application process and liaise with the lender on your behalf, making the whole remortgage process smoother and less time-consuming for you.

Releasing Equity at 70% LTV

With 30% equity in your property, you may be considering releasing some of that equity when you remortgage. This involves borrowing more than your current outstanding balance, with the additional funds paid to you as a lump sum or used for a specific purpose.

How much can you release?

The amount you can release depends on the maximum LTV the lender will allow and what the affordability assessment shows. If you are currently at 70% LTV and the lender is willing to go up to 85% LTV, you could potentially borrow an additional 15% of your property's value. However, the amount will also be limited by what you can afford to repay based on your income and outgoings.

Impact on your rate

Releasing equity increases your LTV, which may move you into a higher rate bracket. For example, if you borrow enough to take your LTV from 70% to 80%, you will be offered rates from the 80% LTV pricing tier rather than the 70% tier. It is important to factor this rate increase into your calculations when deciding how much equity to release.

Common uses for released equity

Homeowners commonly use released equity for home improvements, debt consolidation, helping family members onto the property ladder, or funding other significant expenditure. Each of these purposes has different financial implications, and it is worth considering whether remortgaging is the most cost-effective way to fund your specific need.

The debt consolidation consideration

Consolidating higher-rate debts into your mortgage can reduce your monthly outgoings because the mortgage rate is typically lower than credit card or personal loan rates. However, you will be repaying the consolidated debt over the full remaining mortgage term, which could be 20 or 25 years. This means the total amount you repay, including interest, is likely to be significantly more than if you had paid off the debts over a shorter period. Additionally, you are securing previously unsecured debt against your home.

Always take independent financial advice before releasing equity, particularly if it is for debt consolidation purposes. A qualified adviser can help you understand the full implications and whether it is genuinely in your best financial interest.

The 70% LTV Remortgage Process Step by Step

The remortgage process at 70% LTV follows the same general steps as any remortgage, but your strong equity position can often make things smoother and faster. Here is what to expect at each stage.

Step one: Research and comparison

Begin by researching the market or speaking to a mortgage broker to understand what deals are available. Aim to start this process around six months before your current deal expires, as most lenders will allow you to lock in a rate with a deal valid for up to six months.

Step two: Application

Once you have chosen a deal, submit your application along with the required documents. These typically include proof of identity, proof of income, bank statements, and details of your current mortgage. Your broker can guide you through the application and ensure everything is submitted correctly.

Step three: Valuation

The lender will arrange a valuation of your property. At 70% LTV, many lenders will use an automated or desktop valuation rather than a physical inspection, which speeds up the process. The valuation confirms the property's market value and verifies your LTV ratio.

Step four: Mortgage offer

If the lender is satisfied with the valuation and your application, they will issue a formal mortgage offer setting out the terms of the new deal. Review this carefully and raise any questions with your broker or the lender before proceeding.

Step five: Legal work

A solicitor or licensed conveyancer will handle the legal process of transferring your mortgage from your current lender to the new one. Many remortgage deals include free standard legal work, and the lender's chosen solicitor will manage everything with minimal input needed from you.

Step six: Completion

On the completion date, your new lender pays off your old mortgage and your new deal begins. Your first payment under the new arrangement will typically be due one month later. The entire process usually takes four to eight weeks from application to completion.

Your home may be repossessed if you do not keep up repayments on your mortgage. Seek independent financial advice to ensure remortgaging is right for your circumstances.