Mortgage Comparison Tool (2022)

Make the Right Decision for You

Our mortgage comparison tool can help you evaluate the pros and cons of different home loans.

How It Works

Step 1:
Check out the loan options that you’re interested in learning more about.

Step 2:
Make your selections in our mortgage comparison tool.

Step 3:
We’ll show you the key differences between each loan option.

The Different Types of Home Loans Explained

Here’s what you should know about the different mortgage options.

30-year fixed-rate mortgage

Nearly 90% of homeowners have a 30-year fixed-rate mortgage, according to Freddie Mac in 2019. With this option, the interest rate on the loan doesn’t change over the course of a 30-year repayment period. A 30-year fixed-rate mortgage generally comes with lower, predictable monthly payments but higher interest rates compared to shorter loan terms. That means you’ll end up paying more total interest on a 30-year term.

15-year fixed-rate mortgage

With this mortgage option, you pay off the loan over 15 years, during which your interest rate stays the same. Because you’re repaying the loan in half the time compared to a 30-year mortgage, you typically have higher monthly payments. The upside is that a 15-year mortgage comes with lower interest rates, and you’ll pay less interest overall. You’ll also fully own your home sooner.

Cash-out refinance

A cash-out refinance allows qualified borrowers to tap into the equity they’ve built over time and receive money to pay for home improvements, consolidate debt, or achieve other financial goals. Equity is your home’s value minus what you still owe on your mortgage. If you choose a cash-out refinance, then you’ll replace your existing mortgage with a larger loan, and pocket the difference in cash.

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5/1 ARM

With an adjustable-rate mortgage, also known as an ARM, your interest rate is subject to change periodically. ARMs usually start off with a lower interest rate, but once that initial period ends, the interest rate on the loan can adjust and result in higher monthly payments. How long the initial interest rate will last and how often the rate will adjust depend on the mortgage. A common structure is the 5/1 ARM, where the initial period lasts five years and the interest rate adjusts once a year after that.

FHA loan

These mortgages are insured by the Federal Housing Administration, and allow for a down payment as low as 3.5% of the home’s purchase price. In general, FHA loans can be easier to get approved for than conventional mortgages, and they also have lower credit score requirements. However, FHA loans require borrowers to pay for upfront and annual mortgage insurance premiums. Still, for people with poor credit or smaller down payments, an FHA loan could be the cheapest choice.

VA loan

Eligible service members, veterans, and their surviving spouses can get a VA loan, which is backed by the Department of Veterans Affairs. A down payment and minimum credit score aren’t necessary, but lenders may set their own credit score requirements. Instead of mortgage insurance, borrowers must pay the VA funding fee, which is a one-time payment made at closing or rolled into the loan. Compared with conventional mortgages, VA loans can wind up being more expensive for borrowers with good credit and a sizable down payment.

How To Choose a Home Loan

Once you understand the differences between each type of loan, it’s time to figure out which one best fits your financial situation and goals. These are some questions to help you get started:

  • Are you seeking the most affordable monthly payment (30-year term), or can you afford to make a bigger payment each month to pay less interest overall (15-year term)?
  • Do you prefer stability in your monthly payments (fixed-rate mortgage), or are you OK with the risk of rate increases in exchange for a lower interest rate to start (ARM)?
  • Are you trying to refinance your existing mortgage and borrow against your equity (cash-out refinance)?
  • How soon do you want to become a homeowner? What kind of down payment can you afford to make, and are you willing to pay for mortgage insurance?

Every borrower’s finances and priorities are different, so there’s no universal answer to which mortgage type is the best. It comes down to what you can qualify for and afford over the long term, and which loan offers the most benefits to you.

What’s Next?

Once you’ve decided on your ideal mortgage, the next step is getting matched with lenders to see what kind of terms they’re willing to offer. Similar to how you compared mortgages, it’s a good idea to compare lenders.

Mortgage Comparison FAQ

Here are some frequently asked questions about comparing mortgages.

What does the comparison table tell borrowers?

A loan comparison table breaks down the key points of different types of mortgages. Certain loans can come with a smaller monthly payment, a lower interest rate, a shorter repayment period, or less overall interest charged.

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What is APR vs. interest rate?

The interest rate on a mortgage is the cost you pay each year to borrow money from the lender, expressed as a percentage rate. The loan’s annual percentage rate, also known as APR, is a broader measure of the cost to borrow money. It includes the interest rate, mortgage broker fees, any discount points, and other lender fees. As a result, the APR on a mortgage is typically higher than the interest rate.

What are points on a mortgage?

Mortgage points, also known as discount points, are upfront fees paid to the lender in exchange for a reduced interest rate and lower monthly payment. Paying points can help cut down on the total amount of interest charged for the loan, but it also increases how much you pay in closing costs.

Do I need a 20% down payment?

You need to save for a 20% down payment if you want to get a conventional mortgage and avoid paying for private mortgage insurance. It’s possible for first-time homebuyers to put down as little as 3%, but the loan will come with PMI payments.

There are also mortgage options that allow qualified borrowers to make a low down payment or put zero down — like FHA, VA, and USDA loans — but they charge additional fees or mortgage insurance.

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What is private mortgage insurance? When do I need it?

Private mortgage insurance protects the lender if you become unable to pay your mortgage. PMI is typically required when you have a conventional mortgage and make a down payment of less than 20%.

How does my credit score affect my mortgage rate?

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Generally, borrowers with higher credit scores can expect to receive better mortgage interest rates compared to borrowers with lower credit scores. That’s because lenders use a borrower’s credit score to evaluate how reliable they are in repaying money.

Is it worth refinancing?

Here are some scenarios where refinancing could be worth it:

Interest rates have dropped. If market interest rates are lower now compared with when you first took out your mortgage, refinancing to a better rate could help you save money on interest.

You want to lower your monthly payment. You may be struggling to make your mortgage payments every month. Refinancing to a longer loan term can help lower your payments — but you’ll also pay more interest overall.

Your credit score has increased. If you’ve improved your credit score, then you might be able to get a mortgage with better terms compared to your current loan.

You can repay your loan sooner. By refinancing to a shorter loan term, you’ll have bigger monthly payments but pay less total interest. This option could be worth considering if your financial situation has improved and you can comfortably afford higher payments.

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You want to borrow against your equity. Cash-out refinancing typically comes with lower interest rates than credit cards and personal loans, so it could be a cheaper option if you need to borrow more money.

FAQs

Is a LTV of 55% good? ›

In general, anything under 80% is considered to be a good LTV. Over 80% is considered to be a higher LTV, and whilst there are still mortgages available for 80%, 85%, 90% and even 95% LTVs, you'll have a smaller pool to choose from, and you may have to pay more in the long run.

Is LTV of 50% good? ›

What is a good loan to value ratio? As a general rule of thumb, your ideal loan to value ratio should be somewhere under 80%. Anything above 80% is considered a high LTV – there are plenty of mortgages available for people with LTVs at 80, 90 or even 95%, but you'll be paying much more on interest.

Is a 75 LTV good? ›

As a rule of thumb, a good loan-to-value ratio should be no greater than 80%. Anything above 80% is considered to be a high LTV, which means that borrowers may face higher borrowing costs, require private mortgage insurance, or be denied a loan. LTVs above 95% are often considered unacceptable.

Is 65% a good LTV? ›

A 65% LTV ratio is seen as relatively low. This is usually good news as it means you'll generally be able to access lower interest rates for your mortgage compared to mortgages with a higher LTV. This means smaller monthly mortgage repayments.

Do lenders want a high or low LTV? ›

The lower your LTV, in general, the better off you'll be when it comes to borrowing money. Having a lower LTV can increase your odds of securing a better home mortgage and means you'll have more equity in your home.

Why is my LTV so high? ›

As you repay the loan, the amount owed decreases, which tends to lower LTV. If the value of your property increases over time, that also reduces LTV. But if the property's value drops (if housing prices fall significantly in the local market, for instance), that can push LTV higher.

Is 60% a good LTV? ›

A 60% LTV ratio is considered quite low, so you'll generally be seen as less risky by the lender which might help you access better mortgage rates.

Is it easy to get 50% mortgage deposit? ›

A 50% deposit won't be possible for most mortgage borrowers – especially first-time buyers. You're more likely to be in this situation as a customer looking to remortgage, if you're using proceeds from a previous property sale as a deposit for your next home.

How much deposit do you need for 85% LTV? ›

How much deposit do you need for 85% LTV? To borrow at 85% LTV, this literally means you want to borrow 85% of the value of the property you are buying or remortgaging. You will need a 15% deposit to cover the rest of the property's value.

Is 85% a good LTV? ›

With an 85% LTV, you'll have plenty of good options to choose from, but it could be worth thinking about whether you're able to lower your LTV to 80%, which could open up many more options with better deals and a lower total cost, meaning you'll pay less in the long run.

Is a higher LTV better or worse? ›

As a general rule, the higher the LTV, the more expensive your borrowing costs will be. The cheapest mortgages tend to be on LTVs of 60% or lower. This is because lenders consider people requiring high LTVs as being higher risk.

What is a good LTV for a first time buyer? ›

Mortgages for first-time buyers tend to come with a lower deposit of 5% to 10%. Many mortgage lenders offer first-time buyers 90% loan-to-value (LTV) home loans or even 95% mortgages, though these can be harder to find.

How long does it take to get to 80 LTV? ›

However, start with only a 5% down payment and it will take about 8 years to make it to an 80% LTV level (and close to 9 years to hit the 78% LTV automatic cancellation point).

Can you get a 90% LTV? ›

A 90% LTV mortgage is a financial product where the loan-to-value (LTV) on a new mortgage covers 90% of the value of a property, provided by the lender. The remaining 10% is paid up-front by the borrower as a deposit. Can you get a 90% mortgage as a first-time buyer? Yes.

What is considered a low LTV? ›

What LTV ratios are available? The lowest LTV mortgages available come with a ratio of 60%, going right up to 100% for the highest. Below 80% is considered 'low', with 85-90% and upwards considered 'high'. Low LTV mortgages come with low interest rates but high deposits, and vice versa for loans with high ratios.

Is 20% a good LTV? ›

In order to get approved for a home loan, it's generally good to plan to make a down payment of at least 20% of the home's value—this would create an LTV of 80% or less. If your LTV exceeds 80%, your loan may not be approved, or you may need to purchase mortgage insurance in order to get approved.

Does down payment affect LTV? ›

The loan-to-value (LTV) ratio is a measure comparing the amount of your mortgage with the appraised value of the property. The higher your down payment, the lower your LTV ratio. Mortgage lenders may use the LTV in deciding whether to lend to you and to determine if they will require private mortgage insurance.

What is the maximum loan-to-value mortgage? ›

For a home mortgage, the maximum loan-to-value ratio is typically 80%. Higher loan-to-value ratios may require a borrower to purchase insurance to protect the lender or result in higher interest rates.

How can I improve my LTV? ›

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How can I lower my mortgage LTV? ›

Borrowers Can Reduce Their LTV in a Variety of Ways
  1. Come in with a larger down payment if it's a home purchase loan.
  2. Ask for gift funds to increase your down payment.
  3. Or break your mortgage up into two separate loans (combo loan)
22 Aug 2021

Does appraisal affect LTV? ›

For refinance home loans the LTV is determined by dividing the loan amount by the appraised value. The higher the appraised value, the lower the LTV.

What does 125% LTV mean? ›

In financing terminology, a 125% loan has a loan-to-value (LTV) ratio of 125%. The LTV ratio, which compares the size of a loan relative to the appraised value of the property that serves as security, is used by lenders to judge a loan's default risk.

What is the average LTV in UK? ›

What is a good loan to value ratio in the UK? Unsurprisingly, first-time buyers tend to have a higher LTV ratio, so their monthly payments are higher than those moving from one house to another. The average ratio for first-time buyers is 82 per cent, compared to 74 per cent for home movers.

What does a LTV of 80% mean? ›

The loan-to-value ratio is the amount of the mortgage compared with the value of the property. It is expressed as a percentage. If you get an $80,000 mortgage to buy a $100,000 home, then the loan-to-value is 80%, because you got a loan for 80% of the home's value.

How much deposit do you need for a $1000000 house? ›

Generally, borrowers require 20% of the purchase price as a deposit, but it can be as low as 5% – or even less – if you qualify.
...
How Much Do I Need To Save?
Property purchase priceMinimum deposit
$500,000$25,000
$800,000$40,000
$1,000,000$50,000
1 more row
26 Sept 2022

Should you put down as big a deposit as possible? ›

The golden rule with mortgages is to save as large a deposit as possible. The larger your deposit, the cheaper your mortgage rate will be. Mortgages are categorised according to their loan-to-value (LTV). This means the percentage of the mortgage as a value of the property.

What's considered a large deposit? ›

A large deposit is defined as a single deposit that exceeds 50% of the total monthly qualifying income for the loan. When bank statements (typically covering the most recent two months) are used, the lender must evaluate large deposits.

How much can I borrow home loan 80k salary? ›

On an annual income of $80,000 after-tax, a lender may offer you a mortgage of $1.75 million. This assumes that the applicant's credit score is at least average. It also assumes that there are no outstanding debts owed. The applicant's expenses are also zero.

How much home loan can I get on 80000 salary? ›

How much home loan can I get on an 80,000 salary?
Net monthly incomeHome loan amount**
Rs. 84, 000Rs. 75,07,182
Rs. 82, 000Rs. 68,39,877
Rs. 80, 000Rs. 66,73,051
Rs. 78, 000Rs. 65,06,225
1 more row

How much deposit do you need for a 300000 property? ›

Loan to value (LTV)

' In basic terms, this indicates the percentage of the property's price that will be covered by the mortgage. So, if the property purchase price is £300,000 and you have a 10% deposit (£30,000), you'll need to get a mortgage of £270,000.

Can you get 15% mortgage? ›

Borrowers with a 15% deposit can access 85% loan to value mortgages. An 85% Loan To Value (LTV) mortgage requires borrowers to put down a 15% deposit, so is often used by existing homeowners looking to [purchase] a new property or [remortgage] using the equity in their existing home.

What does 110% LTV mean? ›

What is a Loan-to-Value (LTV) Ratio? The loan-to-value ratio, commonly referred to as LTV, is a comparison of your car's value to how much you owe on the loan. An LTV over 100% means you owe more on the loan than your vehicle is worth.

Can you remortgage at 95 LTV? ›

Can you get a remortgage at 95%? Yes, but it's difficult. Lenders have historically shied away from high-LTV lending because of the heightened level of risk – if you were to default on your payments and the property was repossessed, they risk losing much more than if you had a 65% LTV loan, for example.

How easy is it to get a 5% mortgage? ›

It is possible to get a mortgage with a 5% deposit. That said, it's often a little trickier to get a small deposit mortgage than if you had more cash saved. That's because the smaller your deposit, the more of the value of the property you'll have to borrow. This is where your loan-to-value (LTV) ratio comes into play.

How many times your salary can you borrow for a mortgage? ›

How many times my salary can I borrow for a mortgage? Lenders will typically use an income multiple of 4-4.5 times salary per person.

Can I get a mortgage with only 5% deposit? ›

Is a 5% deposit enough to buy a house? Many lenders will let you put down a small deposit of just 5% of the property's value, which is usually the minimum amount required for a residential mortgage. But bear in mind that the lender has to be comfortable to allow you to borrow 95% of the property's value.

How much deposit do I need for a 2022 mortgage? ›

The minimum deposit for a buy-to-let mortgage is usually 25% of the property's value (although it can vary between 20-40%). Most BTL mortgages are interest-only. This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full.

Can you borrow up to 100 of home value? ›

To qualify for a home equity loan, in many cases your loan-to-value (LTV) ratio shouldn't exceed 85%. However, it's possible to get a high-LTV home equity loan that allows you to borrow up to 100% of your home's value.

Can you get 100% mortgage buy to let? ›

100% mortgages are always offered on a repayment basis, where you pay both part of the loan and the interest payment every month. Can I get a 100% buy-to-let mortgage? No, you always need a deposit to get a buy to let mortgage. Most lenders require at least a 20-25% deposit, and some may require more.

Is LTV based on purchase price or valuation? ›

Home purchase LTV is based on the sales price of the home — unless the home appraises for less than its purchase price. When this happens, your home's LTV ratio is based on the lower appraised value, not the home's purchase price.

What does LTV 85% mean? ›

So, if a bank has a maximum LTV of 85%, that means you cannot owe more on your mortgage plus what you are borrowing for your Home Equity and have that amount total more than 85% of your home's value. For Example. Using our $200,000 home value example, an 85% LTV would be $170,000.

Is 60% LTV The lowest? ›

A 60% LTV mortgage is typically one of the lowest thresholds offered by lenders, which means these deals will likely have some of the best and cheapest interest rates available. Plus, putting down a 40% deposit as opposed to a smaller one, means you'll have to borrow less.

What is a 55% mortgage? ›

LTV means loan-to-value – it's the size of your mortgage as a percent of the total property value. In other words, how much of the value of the property that you're borrowing. A 55% LTV mortgage is 55% loan, 45% deposit or equity.

What is a good LTV for a first-time buyer? ›

Mortgages for first-time buyers tend to come with a lower deposit of 5% to 10%. Many mortgage lenders offer first-time buyers 90% loan-to-value (LTV) home loans or even 95% mortgages, though these can be harder to find.

Can you get a 85% LTV? ›

Yes, you can get 85% LTV buy to let mortgages. What's more, you do not need landlord experience to be considered for one. How much deposit do you need for 85% LTV? To borrow at 85% LTV, this literally means you want to borrow 85% of the value of the property you are buying or remortgaging.

Can a 57 year old get a 30-year mortgage? ›

Can you get a 30-year home loan as a senior? First, if you have the means, no age is too old to buy or refinance a house. The Equal Credit Opportunity Act prohibits lenders from blocking or discouraging anyone from a mortgage based on age.

Can a 60 year old get a 30-year mortgage? ›

Yes, a senior citizen can get a mortgage.

Many interest only lifetime mortgage providers don't restrict the term of their mortgages, so you are able to borrow over the term of your lifetime.

Can a 50 year old get a 25-year mortgage? ›

Therefore getting a 25-year buy-to-let mortgage may well be possible if you're 50. Typically, as you get older you're likely to be offered a shorter repayment period on a mortgage than a younger borrower would.

What is the average mortgage rate UK 2022? ›

As at October 2022 average mortgage rates for a 2-year fixed rate 90% LTV mortgage have risen to 6.21% from a low of 1.95% in January.

What percentage of homeowners have no mortgage UK? ›

According to mortgage statistics, the majority of households (64%) in the UK are owner-occupier, which means either owning a home outright, or owning a home with a mortgage. This equates to an estimated 24.7 million households.

What is considered a big mortgage UK? ›

What is considered to be a large mortgage? A mortgage is considered large if the loan amount is higher than one million pounds. The UK House Price Index (HPI) shows that the average UK house price in January 2022 was £273,762.

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