Remortgage With High LTV

What Counts as a High LTV?

There is no single definition of what constitutes a "high" LTV, but in the UK mortgage market, lenders generally start to treat applications differently once the LTV exceeds 75% to 80%. The higher your LTV, the fewer products are available and the higher the interest rate you will typically be charged.

Here is a broad guide to how lenders view different LTV levels:

• Below 60% LTV — Considered low risk. Access to the very best rates and widest product range.
• 60-75% LTV — Standard risk. Very competitive rates and plenty of choice.
• 75-80% LTV — Moderate. Still a good range of products but rates begin to creep up.
• 80-85% LTV — Higher risk. Noticeable rate increases and some lender restrictions begin to apply.
• 85-90% LTV — High risk. Significantly higher rates and reduced lender choice.
• 90-95% LTV — Very high risk. The highest standard rates with the fewest lender options.
• Above 95% LTV — Generally not available from mainstream lenders in the UK.

The reason LTV matters so much to lenders is straightforward: it measures their exposure to risk. If a borrower defaults on a high LTV mortgage and the lender has to repossess and sell the property, there is a greater chance that the sale price will not cover the outstanding loan balance. This is especially true if property values have fallen.

For you as a borrower, the key takeaway is that every step down in LTV — even a small one — can improve the deals available to you. Understanding where you sit on the LTV spectrum and what you can do to improve your position is the first step towards a successful high LTV remortgage.

Why You Might Have a High LTV

There are many legitimate reasons why a homeowner might find themselves with a high LTV when it comes time to remortgage. Understanding your situation can help you plan the best approach:

You bought recently with a small deposit

If you purchased your home in the last few years with a 5% or 10% deposit, you will not have had much time to build up equity through repayments. Unless property values have risen significantly, your LTV may still be close to your original borrowing level.

Property values have stagnated or fallen

The UK property market does not always go up. Regional variations mean that while some areas see strong growth, others experience periods of stagnation or decline. If your property has not increased in value — or has fallen — your LTV will be higher than you might have expected.

You took out an interest-only mortgage

If you have been on an interest-only mortgage, your monthly payments have only covered the interest, not the capital. This means your mortgage balance has not decreased, and your LTV may be the same as when you first took out the loan.

You released equity previously

If you have remortgaged in the past to release equity — perhaps for home improvements, debt consolidation, or other purposes — your mortgage balance will be higher than it otherwise would be, resulting in a higher LTV.

You have experienced financial difficulties

Periods of financial hardship may have prevented you from making overpayments or may have led to arrears that increased your balance. This can leave you with a higher LTV than you would have had otherwise.

You inherited or received a property with existing debt

In some cases, homeowners inherit a property that already has a high LTV mortgage attached to it, or they take on a property through a transfer of equity with a significant existing loan.

Whatever the reason for your high LTV, the important thing is to focus on what you can do now to get the best possible deal. There is no stigma attached to having a high LTV — it is simply a factor that lenders consider when pricing their products.

How High LTV Affects Your Remortgage Options

The impact of a high LTV on your remortgage options is significant but manageable. Here is how it affects the key aspects of the process:

Interest rates

This is the most obvious impact. Rates increase as LTV rises, and the premium can be substantial at the highest LTV levels. The difference between a 60% LTV rate and a 95% LTV rate can be 1% to 2% or more, which translates to thousands of pounds over the life of a mortgage.

Product availability

As LTV increases, the number of products available to you decreases. At 60% LTV, you might have access to hundreds of products from dozens of lenders. At 95% LTV, this narrows to a much smaller selection. Some product types — such as offset mortgages or certain tracker deals — may not be available at higher LTV levels.

Lender criteria

Lenders apply stricter criteria at higher LTVs. Your credit history, income stability, and employment type all come under greater scrutiny. A blemish on your credit record that might be overlooked at 60% LTV could result in a decline at 90%.

Valuation importance

At high LTV, the property valuation becomes critically important. A valuation that comes in lower than expected can push your LTV above the lender's threshold, potentially scuppering the deal. At lower LTVs, there is more room for the valuation to be slightly below expectations without affecting the outcome.

Fees and costs

At higher LTVs, you need to be more careful about fees. Adding an arrangement fee to the loan increases your LTV further, and some lenders will not permit this at higher levels. Free valuation and free legal work incentives become more valuable at higher LTVs as they reduce your upfront costs.

Ability to borrow more

If you are already at a high LTV, borrowing additional funds through remortgaging is limited. Most lenders will not exceed 90% or 95% LTV, so there may be little or no scope for raising extra capital.

Understanding these impacts helps you set realistic expectations and work with your broker to find the best available deal for your circumstances.

Strategies for Remortgaging With a High LTV

If you are remortgaging with a high LTV, taking a strategic approach can help you access better deals and improve your overall financial position:

Work with a specialist broker

A whole-of-market broker is invaluable when you have a high LTV. They know which lenders are most competitive at each LTV band, which ones have flexible criteria, and where you are most likely to get approved. They can also access exclusive deals and present your application in the best possible light.

Focus on reducing your LTV

Even a small reduction in LTV can make a meaningful difference. Consider making overpayments on your current mortgage, using savings to pay down the balance, or timing your remortgage to coincide with property value increases. Moving from 90% to 85% LTV, or from 85% to 80%, can unlock noticeably better rates.

Consider a product transfer

If your existing lender offers a competitive product transfer, this can be an excellent option at high LTV. Product transfers typically do not require a new valuation or full affordability assessment, which removes two of the biggest hurdles at high LTV. Compare the product transfer rate against the wider market before deciding.

Choose the right product type

At high LTV, a fixed-rate mortgage provides certainty over your payments, which can be reassuring when you have limited equity. If you choose a shorter fix — say two years rather than five — you have the opportunity to remortgage again once your LTV has improved through regular repayments.

Get your finances in order

Ensuring your credit file is clean, reducing existing debts, and demonstrating stable income all strengthen your application. At high LTV, these factors carry even more weight with lenders, and a strong financial profile can be the difference between approval and decline.

Be conservative with property valuations

When calculating your expected LTV, use conservative property value estimates. If you overestimate your property's value and the lender's valuation comes in lower, you could face delays or need to find an alternative product at a higher LTV.

Plan for the medium term

Think beyond the immediate remortgage. Set a goal for reducing your LTV over the next few years through regular repayments and occasional overpayments. Each time you remortgage, aim to be in a lower LTV band than before, progressively accessing better rates over time.

A strategic approach to your high LTV remortgage can yield significant savings and put you on a path to more competitive rates in the future.

High LTV Remortgage With Adverse Credit

Remortgaging with both a high LTV and adverse credit is one of the more challenging scenarios in the UK mortgage market, but it is not impossible. Here is what you need to know:

The combination effect

Having a high LTV and adverse credit compounds the challenge. Each factor on its own narrows your options, and together they can make it significantly harder to find a suitable deal. The rates available will be higher, and the number of willing lenders much smaller.

What lenders consider

Specialist lenders who deal with adverse credit cases will look at the type, severity, and age of the credit issue. A satisfied default from four years ago is viewed very differently from an active CCJ registered last month. Generally, the older and less severe the issue, the more options you will have.

Common credit issues and their typical impact include:

• Late payments — Minor and older late payments may be accepted by some lenders at up to 85-90% LTV.
• Defaults — Satisfied defaults over two years old may be considered by specialist lenders at up to 85% LTV. Recent or unsatisfied defaults are more problematic.
• CCJs — County court judgements, particularly if satisfied and over two years old, may be accepted by some specialist lenders, though typically at lower maximum LTVs.
• IVAs and bankruptcy — These are the most severe credit issues. While lending is possible after discharge (typically after three to six years), maximum LTVs are usually lower, and rates are significantly higher.
• Debt management plans — Some lenders will consider applicants on or recently completed from a debt management plan, though criteria vary significantly.

Working with a specialist broker

In this situation, a specialist adverse credit broker is not just recommended — it is essential. They will have detailed knowledge of which lenders accept specific types and ages of credit issues at various LTV levels. They can save you from making multiple applications that result in rejections, which would further damage your credit score.

Improving your position

If your options are very limited, consider taking steps to improve both your LTV and your credit profile before applying. Pay down debts, address any outstanding defaults or CCJs, and allow time for older issues to become less relevant. Even waiting six months can make a difference if it allows credit issues to age and your LTV to reduce through repayments.

Remember that your home is at risk if you do not keep up repayments on a mortgage. If you are struggling financially, seek free advice from organisations such as StepChange or Citizens Advice before taking on any new borrowing commitments.

Planning Your Path to a Lower LTV

If you currently have a high LTV, developing a plan to reduce it over time can significantly improve your financial position and access to better mortgage deals in the future:

Set clear LTV targets

Know which LTV band you are aiming for and what that means in terms of your mortgage balance relative to your property value. The most impactful thresholds to target are 90%, 85%, 80%, and 75% LTV, as these are the points where rates typically improve most noticeably.

Use overpayments strategically

Most mortgages allow overpayments of up to 10% of the outstanding balance per year without penalty. Regular overpayments accelerate the reduction of your capital balance and lower your LTV faster than standard repayments alone. Even modest overpayments of £100 to £200 per month can make a meaningful difference over a two or five-year fixed period.

Monitor your property value

Keep an eye on sold prices in your area using the Land Registry's Price Paid Data or property portals. Understanding whether your property is increasing in value helps you gauge when you might cross into a lower LTV band.

Consider shorter fixed terms

If your LTV is high, opting for a two-year fix rather than a five-year fix gives you the opportunity to remortgage more frequently. Each time you remortgage, your LTV should be lower — thanks to capital repayments and potential property value growth — allowing you to access progressively better rates.

Avoid extending your mortgage term unnecessarily

While extending your term reduces monthly payments, it also slows the rate at which you pay down capital, keeping your LTV higher for longer. If you can afford the higher payments of a shorter term, you will reduce your LTV more quickly.

Build an emergency fund before overpaying

Before directing spare money towards mortgage overpayments, ensure you have an adequate emergency fund — typically three to six months of essential expenses. Overpayments on your mortgage are not easily accessible if you need cash in an emergency.

Review your position regularly

Check your LTV annually, or whenever there is a significant change in property values in your area. Being aware of your current position allows you to act quickly when you reach a threshold that unlocks better deals.

Reducing your LTV is a marathon, not a sprint. Consistent, disciplined repayments combined with awareness of your property's value will gradually improve your mortgage options and reduce the cost of your borrowing over time.