High Deposit Mortgages
A big deposit generally makes you lower risk, so more lenders will consider you, even with a complex situation or bad credit, and you’re likely to get better deals. Over the last 10 years, we’ve helped over 600,000 borrowers, with 15 experts ready to help. We guarantee to get your mortgage approved and find you the best deal. If we can’t and someone else does, we’ll give you £100!*
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Author: Pete Mugleston
CeMAP Mortgage Advisor, MD
Quick Summary
Having a larger deposit means less risk, which generally opens the door to better mortgage rates and access to more lenders.
Larger deposits are typically considered anything more than 30-35%, where the Loan-to-Value (LTV) is below 65% – at this level, whilst there are lenders for complex situations right up to 100% in some scenarios, far more lenders offer more flexible terms – things like credit history and out-of-the-norm property or income are much more widely accepted.
Larger deposits also make specialist lenders more comfortable considering cases that are outside of their usual policy, and we often see customers approved on appeal when there is a stronger LTV.
If you want to simply establish the best deal, or chat through your situation, however complex, one of our team can help!
In this article:
- What is considered a large deposit for a mortgage?
- Is it easier to get a mortgage with a large deposit?
- Loan-to-value calculator
- How to get a better mortgage deal with a large deposit
- How does a large deposit affect mortgage repayments?
- Can you get a mortgage with no job but a large deposit?
- Can you get a mortgage with bad credit if you have a large deposit?
- Speak to a broker
Anything over 25% is considered a large deposit. This is the threshold at which your high deposit opens up better deals and more competitive rates.
The average minimum deposit requirement for a mortgage in the UK is 10%. However, it’s sometimes possible to get a mortgage with a 5% deposit or with none at all, depending on your other circumstances and the type of mortgage.
Having a 25% deposit puts you in a strong position to buy a house and is the level where you’ll start to notice preferential interest rates coming in, meaning your mortgage will cost you less monthly and over its full term.
25% deposits are less common for first-time buyers, but it may be that you’ve been able to include something like a gifted deposit or an inheritance to boost your borrowing power.
50% deposits are more common for people selling homes with a lot of equity who’ve been paying off an existing mortgage for a while and have seen the value of their home increase.
With a 50% deposit, you’ll be seen as low risk for lenders, so you’ll normally get the best available rates. Other potential risk factors, such as bad credit, may carry less significance.
If you’re fortunate to have a 75% deposit, perhaps because you’re selling a family home or downsizing, you shouldn’t have too much difficulty securing a mortgage. However, it might be worth getting some financial advice just to be sure that putting that amount of cash towards a house purchase is the best way to invest it for you.
Technically speaking, you can have as large a deposit as you want—100%, and you become a cash buyer! However, you may find that having a very large deposit and only needing a small loan will put some lenders off, as it won’t make it worth their while.
While a handful of lenders have no limits, most have a minimum loan value, typically between £25,000 and £50,000.
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Is it easier to get a mortgage with a large deposit?
Having a high deposit is certainly going to be a plus point in your mortgage application. Still, lenders will look at a combination of factors to assess your eligibility, including your credit history, age, and other things, such as the type of property you’re buying.
The other key thing lenders will want to assess is affordability. Regardless of the size of your deposit, your lender will want to ensure you can afford your monthly repayments, so they’ll look at your annual salary and set a cap on lending based on that. On average, the maximum you can borrow on a mortgage is 4.5 times your salary. Still, it is possible to get a 5.5 times salary mortgage, or sometimes even higher, depending on your circumstances. Lenders will also consider other credit commitments in their affordability calculations, such as credit cards, loans, dependents, and hire purchases.
While a bigger deposit doesn’t mean you can afford to borrow more, as this is capped based on your income, it can mean that you can afford to buy a higher-value property together with your loan.
Loan-to-value calculator
You’ll notice that many lenders will talk about your deposit regarding your loan-to-value ratio, or LTV. Your LTV is the size of the loan you want relative to the total value of the property, so a higher deposit means a lower LTV. For example, a deposit of £50,000 on a property worth £200,000 equates to an LTV of 75%.
If you’re unsure what your LTV is, you can work it out using our simple calculator. Just enter your property’s value and the mortgage size you’re looking for, and we’ll do the rest.
LTV Calculator
This calculator will tell you what your loan-to-value (LTV) ratio is, based on the property's value, your deposit/equity and the amount you're borrowing.
Your Results:
Your LTV is
This means that most mortgage providers will consider your deposit amount to be more than satisfactory, but speaking to a broker is still recommended to ensure you get the best deal.
This means you’re likely to meet the deposit requirements at most lenders, but since many reserve their best rates for those with higher deposits, speaking to a broker is recommended.
Many mainstream mortgage providers would consider this high and be reluctant to lend. Applying through a mortgage broker may be necessary to find a specialist low deposit mortgage lender.
LTVs have a direct impact on the rates available to you - speak to a mortgage broker and find out how to get the best deal based on your ratio.
Get StartedHow to get a better mortgage deal with a large deposit
Just because you have a high deposit doesn’t mean that finding a mortgage will be easy, and in fact, if you go in overconfident without doing the groundwork, you risk having your mortgage application declined. Luckily, there are a few things you can do beforehand to make sure you get the best possible deal.
Get matched with a broker experienced in high deposit mortgages
The typical products and rates advertised by lenders may not be applicable for larger deposits, and many have exclusive rates or more room for negotiation when you have a large chunk of money to put down. Some of these preferential rates may be hard to find without an intermediary, so it pays to find a broker who specialises in large deposit mortgages.
Make an online enquiry now, and we can match you with an advisor with just the right expertise for your circumstances.
Compare rates at different LTVs
At this stage, it’s worth taking some time with your broker to compare interest rates based on your current deposit and the next threshold for you to get better interest rates.
For example, perhaps you currently have an LTV of 72%, but with a little more saving or work on maximising your deposit, you could bring it down to 70%. Lenders may offer a more competitive rate at this level of deposit, making it worthwhile spending a little more time-saving. Knowledge is power here, and a broker can give you that.
Understand your credit history
While a large deposit can open up better rates, other risk factors, such as your credit history, could mean you don’t benefit as you should from your savings. It’s still possible to get a bad credit mortgage, but to get the very best rates with a large deposit, you will ideally have a clean credit history.
Get copies of your credit reports in advance to ensure you know where you stand. Correct any errors now and address any issues up front to prevent them from impacting the mortgage application process.
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How does a large deposit affect mortgage repayments?
Increasing the size of your deposit can reduce the amount you need to borrow, bringing down your monthly repayments. This is a positive for lenders, especially if you’re on a low income, as it makes your mortgage more affordable.
Use our mortgage repayment calculator below to compare your mortgage repayments under different terms and rates.
Mortgage Repayment Calculator
This calculator can tell you the monthly and overall cost of your mortgage, based on the loan amount, interest rate, and term length.
Your Results:
The monthly repayments on a mortgage would be
The total amount paid at the end of your mortgage term would be
Get started with an expert broker to find out how much they could help you save on your mortgage repayments.
Get StartedCan you get a mortgage with no job but a large deposit?
Having a large deposit can definitely help you to get a mortgage if you have a low income, but getting a mortgage with no job at all can be difficult. The first thing to do is to consider any other sources of income, as a job isn’t the only income that counts for mortgage purposes. It is possible to use certain benefits as income for a mortgage, for example, or income from pensions, investments, rental income or maintenance payments.
Speak to your broker about your situation to get a better idea of which lenders might be able to offer you a mortgage without a job but a large deposit.
Can you get a mortgage with bad credit if you have a large deposit?
Mortgage lending always comes down to risk, and while bad credit is seen as a risk factor, some of this risk can definitely be mitigated by offering a larger deposit. The impact of your bad credit will also depend on the details of the credit issue – the type of problem, whether it was something serious like a CCJ or just one missed payment, how much money was involved and how long ago it took place.
Get matched with a broker experienced in dealing with large deposits
While you might think that having a large deposit means it will be easy to secure a mortgage, that’s unfortunately not always the case, as many other factors come into play. You could also be faced with significantly more research, as your high deposit will open up many options and exclusive rate deals. Don’t worry; a broker will do all of this for you, freeing up your valuable time.
You don’t even need to spend hours finding the best high-deposit mortgage broker, as our broker matching service does the hard work here for you, too.
Call us at 0330 818 7026 or make an online enquiry, and we’ll assess your needs and arrange a chat with an advisor with specific experience in securing large deposit mortgages. There’s no obligation, so you’ve got nothing to lose.
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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in mortgage deposits
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Pete Mugleston
CeMAP Mortgage Advisor, MD
Pete, a CeMAP-qualified mortgage advisor and an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete successfully went the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained and his love of helping people reach their goals led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!
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