The Co-operative Bank has announced a new series of mortgage rate cuts, music to UK remortgagers’ and homebuyers’ ears in search of the best deals. Some residential rates fell as much as 0.10% and buy-to-let rates as much as 0.12%. The cuts bring the bank into providing a series of mortgage products with interest rates below 4%, a rate that is becoming the new norm in the current market.
Co-op Bank’s New Sub-4% Mortgage Deals
One of the new range’s star features is a 2-year fix at 80% Loan-to-Value (LTV) for 3.97%.
- Minimum loan size: £750,000
- Product fee: £1,999
For residential remortgaging, Co-op Bank will also launch a 2-year fix at 3.85%, reaching 60% LTV with a £999 fee.
What Does 80% Loan-to-Value Mean?
Another one of the most significant points to which lenders pay attention while deciding how much they lend you is the Loan-to-Value (LTV) ratio. It is a ratio of the value of your property that will be financed under the mortgage.
For example:
Suppose your property’s value is £500,000 and you are lending £400,000. Your LTV is 80%.
An 80% LTV home loan will generally require the borrower to make a 20% deposit (£100K). This combination of lender risk and borrower equity generally offers more attractive interest rates than higher geared LTV products.
Why Sub-4% Mortgage Rates Matter
UK mortgage rates have fluctuated up and down over the last few years in response to movements in the Bank of England base rate, inflation, and general economic conditions. To discover rates below 4% at low-cost LTV levels is good news for borrowers, especially in a world where affordability has been an issue.
Lower mortgage rates mean:
- Reduced monthly repayments
- Increased buying power for purchasers
- Even more scope for remortgagers to save or release equity
How Oportfolio Mortgages Can Help
Having multiple lenders, including Co-op Bank, to choose from, at Oportfolio Mortgages, we obtain the maximum value mortgage products for our clients. Whether you’re buying your first home, moving home or remortgaging, our specialists can:
- Quote comparison across the entire market
- Provide you with the best mortgage advice for your circumstances
- Guide you through applying for a hassle-free experience
If you’re interested in securing an 80% LTV mortgage with a rate under 4%, now is an excellent time to explore your options. Call us today.
80% LTV Mortgage FAQ – UK Homebuyers & Remortgagers
1. What does 80% LTV mean in a mortgage?
LTV stands for Loan-to-Value ratio. An 80% LTV mortgage means you are borrowing 80% of the property’s value and putting down a 20% deposit. For example, if the property costs £300,000, an 80% LTV mortgage would be £240,000, and your deposit would be £60,000.
2. Are 80% LTV mortgages good for buyers?
Yes. 80% LTV mortgages typically offer better rates than higher LTV options because lenders see them as lower risk. With a 20% deposit, you are more likely to access competitive interest rates, such as the Co-op Bank’s sub-4% deals.
3. Can I get an 80% LTV mortgage with less than a perfect credit score?
It’s possible. While a stronger credit score will improve your chances of approval, many lenders, including Co-op Bank, will still consider applications from those with less-than-perfect credit, depending on the overall profile.
4. What is the advantage of a sub-4% mortgage rate?
A mortgage rate under 4% can significantly reduce your monthly repayments compared to higher-rate deals. Over the course of your mortgage term, this could save you thousands of pounds.
5. How do I know if I qualify for Co-op Bank’s 80% LTV mortgage?
Eligibility depends on your income, credit profile, property value, and deposit size. Speaking to a mortgage broker like Oportfolio Mortgages ensures you get personalised advice and access to the most competitive offers.
6. Can I remortgage to an 80% LTV deal?
Yes, if you have enough equity in your home, you can remortgage to an 80% LTV product. This can be a good way to access better interest rates or release funds for home improvements.
