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A Guide to 95% Remortgages

Remortgaging can be a lucrative option for many a homeowner. Read on to find out how remortgaging at 95% LTV can work for you.

For those of you asking what a remortgage is, you’re in the right place! Whilst many remortgages when their incentive period ends, and they end up on a standard variable rate mortgage, 95% remortgages work a little differently. Over this article, we’re going to open your eyes to the idea of a 95% remortgage and why it could be an option for you. Read on to find out more!

What do we mean by a 95% remortgage?

Remortgaging is basically the process of finding a new mortgage deal with either your current lender or a new lender altogether. So, what does the 95% mean? This is with regards to the LTV (loan to value) of a property. Basically, the LTV is the size of your mortgage in accordance with the value of the property it is secured against, so a house worth £100,000 with a mortgage of £95,000 has a loan to value of 95%. The mortgage makes up 95% of the value of the property Doesn’t sound too difficult to understand, does it?

The important thing to remember is that, the lower the LTV, the better your mortgage rate. This is because lenders believe that if you have a smaller equity in your home then their exposure is far greater. For example, if the value of the property was to fall below the amount that you had originally paid for your home, then you would be in what's known as negative equity. Basically your house is worth less than your mortgage. If the lender had to repossess then they would lose money. If you had a larger amount of equity & house prices fell then the lenders money would still be safe.

With the help to buy scheme, you can now get a mortgage with a small 5% deposit on a house. However, when it comes to remortgaging, this is far different. Most lenders don’t like to offer remortgage deals with a 95% LTV due to the risks it may pose to them. However, where there’s a will there’s a way! Let’s look at how you could still do this!

How will people be able to remortgage at 95% LTV?

One of the main problems that face those who want to remortgage at 95% LTV is that there are loads of other deals out there on the market that probably aren’t as good as the one you’re currently on! The more volitile the financial markets are, the less 95% deals become available & those that high are offered with higher rates.

How we can help?

If you’ve got any more questions about what a remortgage is, then don’t worry! At Mortgages Online we can compare thousands of different deals from hundreds of different lenders to help find the right deal for you!

Remortgaging can be used for many options, including financing home improvements or even just getting yourself a better deal. Mortgage lenders can offer you a variety of options when it comes to remortgaging. If you’d like to link to it, visit our Remortgaging section.

MO has loads of resources on not only mortgages but life insurance and home insurance too! All of our guides and services are free to use, so there’s no need to get your credit card out.


Laura Waller

Laura Waller has been working in the mortgages industry since 2013, joining an independent brokerage in Essex. Laura has CeMAP 2 & 3 – Certificates in Mortgages Advice and Practice. Since then Laura oversees marketing for Mortgages Online, using her experience and expertise to write articles and blogs about mortgages and related topics.

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