When you buy a property, you will need to put down a deposit.
This is money that goes towards the cost of the property you’re purchasing.
The more money you put down, or the deposit if you like, the lower your interest rate could be.
This is called the “Loan to Value” or LTV.
This is simply the value of your home, compared to the amount that is secured against your mortgage.
For example, with a £15,000 deposit on a £150,000 property, the deposit is 10% of the price of the property, and the LTV is the remaining 90%.
The mortgage is secured against this 90% portion. The bigger the deposit, the better the interest rate you can get.
The lower the LTV, the lower your interest rate is likely to be. This is because the lender is less at risk with a smaller loan.
The best rates available are for people with a 40% deposit.
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