Subscribe to our Feed
60% Mortgage
A 65% mortgage, that is a mortgage where you want to borrow 60% of the property value is ideal in these times of the credit crunch. One of the reasons a 60% mortgage is viewed by lenders in such a good light is it reduces the risk to a lender as their will be 40% equity in the property as soon as the mortgage completes.
The borrower will either have 40% equity in the property for a remortgage or have 40% deposit available for a purchase - either way a lender will look very favourably on a mortgage borrower requiring a 60% mortgage.
Deposits and Borrowing for a 60% Mortgage
| Property Value | Mortgage Deposit at 60% LTV (40% Deposit) |
Mortgage Borrowing at 60% LTV |
|---|---|---|
| £200,000 | £80,000 | £120,000 |
| £210,000 | £84,500 | £126,000 |
| £220,000 | £88,000 | £132,000 |
| £230,000 | £92,000 | £138,000 |
| £240,000 | £96,000 | £144,000 |
| £250,000 | £100,000 | £150,000 |
| £260,000 | £104,000 | £156,000 |
| £270,000 | £108,000 | £162,000 |
| £280,000 | £112,000 | £168,000 |
| £290,000 | £116,000 | £174,000 |
| £300,000 | £120,000 | £180,000 |
| £350,000 | £140,000 | £210,000 |
| £400,000 | £160,000 | £240,000 |
| £450,000 | £180,000 | £270,000 |
| £500,000 | £200,000 | £300,000 |
What interest rates will a 60% mortgage have?
A 65% mortgage will have interest rates ranging from 4.99% for those with good credit to 11 or 12% for those with bad credit.
The likely hood is that the interest rate you qualify for will sit somewhere between these depending on your individual circumstances. For instance if you have only defaults and no CCJ's or mortgage/rent arrears its likely your interest rate will be around the 7% mark.
We have a few pages showing the interest rates for mortgages ranging from £160,000 to £200,000 ranging over 10 to 25 years showing rates of 7 to 10%, another section of this web site will show the monthly costs similar to the one mentioned above but for mortgages ranging from £210,000 to £250,000 which will give you some indication of the costs involved for mortgage borrowing at various levels.
What sort of products will a 60% mortgage allow
A 65% mortgage will allow all the usual types of mortgages to be borrowed such as fixed rate mortgages, tracker, variable and discounted rate mortgages, either on capital repayment and interest only.
If you have good credit you may find you have more choice over the types of mortgage products available and will normally find better terms and interest rates available as high street mortgages tend to be based around the Bank of England bad rate whilst adverse credit mortgages end to be based around the London Inter Bank Offered Rate (LIBOR).
A 60% mortgage will allow mortgages, remortgage's, self cert mortgages and buy to let mortgages to complete. The exact terms of the products available will depend on your individual circumstances but even with CCJ's and mortgage arrears, meaning you will require a bad credit mortgage,you should be able to get a mortgage application to completion with the help of a specialist mortgage broker.
What charges are likely with a 60% mortgage
The charges being levied on a mortgage of 60% of the property value will depend on the lender but there are certain similarities to the charges regardless of the lender and your circumstances.
The main similarities would be the need for a solicitor or conveyancer, valuation fee and possible a lender application fee.
It used to be that mortgages aimed at people with good credit or no credit problems were charged less by the respective lender than those applying for a mortgage with bad credit, however in recent months the gap between what lenders are charging has narrowed and the lender application charges tend not be too different regardless of your credit worthiness.
Most mortgages in today's market will have a lender arrangement fee of between 1% and 2%, i is unlikely a mortgage if 65% will have a higher lending charge due to the low loan to value, the main difference when it comes to apply for a mortgage is that the mortgage broker is likely to charge more for a mortgage with adverse credit then a mortgage application with good credit.
It should be noted that none of Baker Financial's mortgage brokers charge any broker fee and will source a mortgage free of charge regardless of your credit rating. Our brokers receive a commission from the lender, to find out why or brokers don't charge a broker fee see our no broker fee page.
