Remortgage at 80% LTV

What Does 80% LTV Mean for Your Remortgage?

Loan-to-value, or LTV, is the percentage of your property's value that is covered by your mortgage. If your home is worth £250,000 and you owe £200,000, your LTV is 80%. The remaining 20% is your equity — the portion of the property you own outright.

At 80% LTV, you sit at an important boundary in the mortgage market. Many lenders use LTV bands to price their products, and rates tend to improve significantly once you drop below 80%. However, being at 80% still gives you access to a healthy range of deals from most high street and specialist lenders.

Here is how LTV typically affects the rates available to you:

• 60% LTV and below — The best rates available, reflecting the lowest risk to lenders.
• 60-75% LTV — Very competitive rates with a wide choice of products.
• 75-80% LTV — Good range of deals, though rates may be slightly higher than the lowest LTV bands.
• 80-85% LTV — Fewer products available and rates begin to increase noticeably.
• 85-90% LTV — Higher rates and stricter criteria from lenders.
• 90%+ LTV — The most expensive rates with the fewest lender options.

Your LTV is calculated at the point of application, so if property values have risen since you took out your original mortgage, or if you have been making regular repayments, your LTV may already be lower than you think. It is always worth checking your current position before you start comparing deals.

What Rates Can You Expect at 80% LTV?

Interest rates at 80% LTV are competitive, though they are typically a step above what you would find at 75% LTV or lower. The exact rate you are offered will depend on a number of factors beyond just your LTV, including your credit history, income, the type of deal you choose, and the overall state of the mortgage market.

When comparing remortgage deals at 80% LTV, you will encounter several types of product:

Fixed-rate mortgages

These lock your interest rate for a set period, usually two, three, or five years. Fixed rates provide certainty over your monthly payments, which can be helpful for budgeting. At 80% LTV, two-year fixed rates tend to be slightly lower than five-year fixes, but the five-year option offers longer-term security against potential rate rises.

Tracker mortgages

Tracker rates follow the Bank of England base rate, plus a set margin. For example, a tracker at base rate plus 1.5% would mean your rate moves up or down whenever the base rate changes. These can be attractive when rates are expected to fall but carry the risk of higher payments if rates rise.

Discount variable rate mortgages

These offer a discount off the lender's standard variable rate (SVR) for a set period. Your payments can go up or down because the SVR can change at the lender's discretion, not just in response to base rate movements.

To get an accurate picture of the rates available to you, it is worth speaking with a whole-of-market mortgage broker who can compare products from across the market and identify the best options for your circumstances.

Keep in mind that the headline rate is not the only cost to consider. Arrangement fees, valuation fees, and legal costs all affect the total cost of the deal. A product with a slightly higher rate but no fees can sometimes work out cheaper overall than a low-rate deal with a large upfront fee.

How to Improve Your LTV Before Remortgaging

If you are currently sitting at 80% LTV, even a small improvement could push you into the 75% LTV band, where rates are noticeably better. Here are some practical ways to reduce your LTV before you remortgage:

Make overpayments on your current mortgage

If your existing mortgage allows overpayments without penalty — many lenders permit up to 10% of the outstanding balance per year — making additional payments will reduce your loan balance and lower your LTV. Even a few months of overpayments before you remortgage could make a meaningful difference.

Wait for property value increases

If house prices in your area are rising, your LTV will naturally decrease over time as your property becomes worth more. While you cannot control the housing market, it may be worth considering the timing of your remortgage if values are trending upwards.

Make home improvements

Certain improvements can increase the market value of your property. Extensions, loft conversions, updated kitchens and bathrooms, and energy efficiency upgrades can all add value. However, be careful to invest wisely — not all improvements offer a positive return, and you should avoid overspending relative to the ceiling price in your area.

Use savings to reduce the loan

If you have savings available, using a lump sum to pay down your mortgage balance before remortgaging could be a cost-effective strategy. The long-term savings on your mortgage rate could outweigh the interest you would earn on those savings in a bank account.

Challenge the valuation

If you believe your property has been undervalued during the remortgage process, you may be able to challenge the valuation. Provide evidence of comparable sales in your area that support a higher value. Your broker can advise on whether this is likely to succeed.

Dropping from 80% to 75% LTV on a £200,000 mortgage by paying down £12,500 could save you a significant amount in interest over a five-year fixed term, so it is well worth crunching the numbers to see whether this approach makes financial sense for you.

The Remortgage Process at 80% LTV

Remortgaging at 80% LTV follows the same general process as any other remortgage. Understanding the steps involved can help you prepare and ensure everything runs smoothly:

Step 1: Review your current deal

Check when your existing mortgage deal ends and whether any early repayment charges (ERCs) apply. Most lenders allow you to start the remortgage process up to six months before your current deal expires, so you can lock in a new rate without paying penalties.

Step 2: Check your credit report

Review your credit file with agencies such as Experian, Equifax, or TransUnion. Correct any errors and ensure all your financial accounts are up to date. Being on the electoral roll and having a consistent address history can also help your application.

Step 3: Gather your documents

You will need proof of identity, proof of income (payslips for employed applicants or accounts and tax returns for the self-employed), recent bank statements, and details of your current mortgage including the outstanding balance and any ERCs.

Step 4: Compare deals

Use a whole-of-market mortgage broker to compare the full range of products available at your LTV. They can factor in fees, rates, and features to identify the most cost-effective deal for your situation.

Step 5: Apply

Submit your application to the chosen lender. They will carry out affordability checks, a credit assessment, and a property valuation. At 80% LTV, most lenders will accept a desktop or automated valuation rather than requiring a physical inspection.

Step 6: Legal work and completion

A solicitor or conveyancer handles the legal transfer of the mortgage from your old lender to the new one. Many remortgage deals include free legal work and a free valuation to reduce your upfront costs. The process typically takes four to eight weeks from application to completion.

Throughout the process, your broker will keep you informed and liaise with the lender on your behalf, making the experience as straightforward as possible.

Should You Remortgage or Stay on Your Current Deal?

Just because you can remortgage does not always mean you should. There are situations where staying on your current deal — or moving to your lender's standard variable rate — might actually be more appropriate. Here are some factors to weigh up:

Reasons to remortgage at 80% LTV:

• Your current fixed, tracker, or discount period is ending and you will move onto a higher SVR.
• Interest rates have fallen since you took out your current deal, and you could secure a lower rate.
• You want to switch from a variable rate to a fixed rate for payment certainty, or vice versa.
• You need to raise additional funds for home improvements, debt consolidation, or other purposes.
• You want to change your mortgage term — either shortening it to pay off your mortgage sooner or extending it to reduce monthly payments.

Reasons to stay put:

• You have significant early repayment charges on your current deal that would outweigh the savings from switching.
• Your circumstances have changed (for example, reduced income or a weaker credit score) and you may not qualify for a better deal elsewhere.
• You are already on a very competitive rate that is difficult to beat.
• You are planning to sell your property in the near future, in which case a short-term deal or staying on your SVR may be more flexible.

A qualified mortgage adviser can run the numbers for you and compare the total cost of remortgaging against staying on your current deal. This should include any fees, the interest rate difference, and the remaining term of your mortgage. Even small differences in rate can add up to substantial sums over the life of a mortgage, so it is always worth doing the maths.

Remember that mortgage advice should be sought from an FCA-authorised adviser who can consider your full financial circumstances and make a personal recommendation.

Common Mistakes to Avoid When Remortgaging at 80% LTV

Remortgaging can save you a significant amount of money, but there are some common pitfalls that homeowners at 80% LTV should be aware of:

Focusing only on the interest rate

A low headline rate is attractive, but it does not tell the whole story. A deal with a rate of 4.5% and no fees could be cheaper overall than a deal at 4.2% with a £1,500 arrangement fee, depending on the size of your mortgage and how long you plan to stay on the deal. Always compare the total cost of the mortgage over the full term of the product.

Not checking your LTV position

Property values fluctuate, and you may be closer to a lower LTV band than you realise. Before accepting an 80% LTV deal, check whether your property value has increased enough to put you in the 75% bracket. Even a modest increase could unlock better rates.

Ignoring early repayment charges

If your current deal has not yet ended, check whether ERCs apply. These can be substantial — often between 1% and 5% of the outstanding balance — and could wipe out any savings from switching to a lower rate.

Leaving it too late

Start looking at your remortgage options at least six months before your current deal ends. This gives you time to compare deals, submit an application, and complete the legal work without being rushed onto your lender's SVR.

Not considering a product transfer

Your existing lender may offer a product transfer — a new deal without the need for a full application, valuation, or legal work. While these are not always the cheapest option, they can be quick and hassle-free. Compare any product transfer offer against what is available on the wider market before making a decision.

Overlooking cashback and incentives

Some lenders offer cashback, free valuations, or free legal work as part of their remortgage packages. These incentives can reduce the overall cost of switching and should be factored into your comparison.

By avoiding these common mistakes and seeking professional advice, you can make sure your remortgage at 80% LTV works as hard as possible for your finances.