80% Mortgages

What are they?

An 80% mortgage is a mortgage where 80% of the value of the property to be purchased is borrowed. In other words, the purchaser is loaned 80% of the property value.

By way of example, if a house costs £200,000, an 80% mortgage would be £160,000.

In general, the bigger the deposit that is placed on a property, the better the mortgage terms. Deposits of 20%, or more, facilitate access to lower interest rates. Big deposits also offer the flexibility of lower monthly loan repayments, or even a shorter mortgage term.

The 20% deposit required for an 80% mortgage is large enough to ensure that most lenders will offer their best deals.

The mortgage will also not be subject to any “higher lending charges” (HLCs). These are fees some lenders charge for customers borrowing more than 90% of the value of the property they are buying.

Providers of 80% Mortgages

Most lenders will provide 80% mortgages. These mortgages represent the mainstream level of borrowing and are very easy to obtain.

There is access to a wide variety of types of mortgage, such as:

• Variable rate
• Fixed rate
• Tracker
• Discounted rate

Mortgage repayment can be standard, flexible or offset. Flexible or offset mortgages allow various combinations of flexible repayments and permit savings to be used to reduce the amount of interest paid.