What Counts as a Small Amount of Equity for a Remortgage?
In the context of remortgaging, "small equity" typically refers to situations where your equity is between 5% and 15% of your property's current value. This corresponds to LTV ratios of 85% to 95%. The industry generally treats 80% LTV as the point where the market starts to thin out, and 90% LTV and above as specialist territory where mainstream lender options become very limited.
It is worth noting that your equity position for remortgage purposes is calculated using your property's current market value, not the price you originally paid. If you purchased three years ago and property values in your area have risen, your LTV may be lower — and your equity higher — than you realise. An online valuation estimate can give you a starting point, though the lender will commission their own valuation as part of the application.
Equity below 5% — an LTV above 95% — is extremely difficult to remortgage, as very few lenders will consider lending at that level outside government scheme products. If your equity is below 5%, the most common path is to remain with your existing lender and explore the retention deals they offer, which do not require a new affordability assessment or valuation in the same way a full remortgage does.
Negative equity — where your outstanding mortgage is greater than your property's value — is a separate and more complex situation. In negative equity, remortgaging to a new lender is generally not possible, and staying with your existing lender on their retention products or waiting for property values to recover are the most realistic options. This is a situation where speaking directly to your current lender is the right first step.
Lender Options at 85%, 90% and 95% LTV
The 85% LTV tier is the widest in terms of available lenders among the higher LTV bands. A reasonable number of specialist and building society lenders will consider remortgages at this level, and while the products are more restricted than at 75% or 80% LTV, there is a genuine market. Rates at 85% LTV are higher than at lower bands, but competition among willing lenders means the premium is not prohibitive.
At 90% LTV, the lender pool narrows considerably. Most high street lenders will not offer 90% LTV remortgages — particularly where there is any adverse credit or non-standard income — and the market is largely served by specialist lenders and some building societies. Products at 90% LTV are predominantly fixed rates, and arrangement fees may be higher than at lower LTV bands. That said, 90% LTV remortgages are a well-established part of the market, and specialist brokers regularly arrange them.
At 95% LTV, the market becomes very restricted. Very few lenders offer 95% LTV remortgages in the conventional market. Those that do tend to be specialist lenders with specific product criteria, and the rates and terms reflect the elevated risk. At this LTV, it is also worth considering whether making a lump sum overpayment — if you have savings available — to bring your LTV below 90% or 85% would open significantly better options. Even a small reduction in LTV at this band can have a meaningful effect on available products.
Throughout all these higher LTV bands, having a clean credit profile, stable verifiable income, and a well-maintained property are the factors that most reliably broaden your access to the available lender pool. These are the factors within your control that can make a meaningful difference to outcomes at the top of the LTV scale.
