Answers · UK 2025/26
How does mortgage deposit size affect the rate I get?
Bigger deposit = lower LTV = better rate. UK mortgage rates step down at 95%, 90%, 85%, 80%, 75%, 60% LTV thresholds. The biggest jumps are at 90%→85% (~0.4% saving) and 75%→60% (~0.3-0.5% saving). 60% LTV gets the cheapest rates.
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UK mortgage rate vs deposit / LTV (Loan-to-Value) bands 2025. Lenders price rates in LTV tiers — the most common bands are 95%, 90%, 85%, 80%, 75%, 60%. At each tier boundary, rates drop. Typical 5-year fixed rates for residential, prime credit, mid-2025: 60% LTV: ~4.0-4.3% (best buys); 75% LTV: ~4.2-4.5%; 80% LTV: ~4.3-4.6%; 85% LTV: ~4.4-4.7%; 90% LTV: ~4.6-4.9%; 95% LTV: ~5.0-5.5%. Savings from a bigger deposit on a £250,000 home (£1,250 monthly = ~£375/year per 0.1% rate cut over 25 years). Going from 90% to 80% LTV: 0.3% saving × £200k = £600/year. Going from 80% to 75% LTV: another ~£300/year. Going from 75% to 60% LTV: another ~£700-£1,000/year. Practical advice: above 90% LTV, every 1% extra deposit can save you ~0.05-0.10% in rate. Below 60% LTV, additional deposit rarely improves rate. Stamp Duty consideration: a bigger deposit doesn't affect SDLT, which is on purchase price. First-time buyers in England/NI get SDLT relief on purchases up to £500,000. Mortgage Guarantee Scheme: government-backed 95% LTV deals; targeted at first-time buyers without family help.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.