Dropping from 85% LTV to 80% (or 80% to 75%) can unlock mortgage rates 0.3–0.6% cheaper. This calculator tells you exactly what it takes to get there.
Loan-to-value bands are set in 5% increments.
LTV bands are assessed at each remortgage. Even a £1 overpayment can nudge you over the threshold and save thousands over the next fix period.
UK lenders price mortgages by loan-to-value band, not by exact percentage. Everyone between 80.01% and 85% LTV gets the same rate; everyone between 75.01% and 80% gets a different (usually cheaper) one. A £1 overpayment that nudges you into a lower band can save you thousands.
Most UK lenders price in these bands: 95%, 90%, 85%, 80%, 75%, 70%, 65% and 60%. The difference between each band is usually 0.1–0.3% on a 2-year fix, and 0.2–0.5% on a 5-year fix. The biggest savings are below 80%, the lowest rates in the market are typically reserved for 60% LTV and below.
Your lender's LTV is based on their valuation, not Zoopla's estimate. At remortgage they'll usually do a desktop valuation (free, automatic). You can sometimes request a full valuation if you think the desktop figure is too low, fees typically £300–£500 but worth it if it shifts a band.
If you need to overpay a lump sum to hit the threshold, check whether it breaches your annual 10% allowance. Our guide to the 10% rule and the lump sum calculator can both help here.
£255,000 mortgage, £300,000 property = 85% LTV. To drop to 80%, you need to reduce the balance to £240,000, a £15,000 overpayment. If that unlocks a 0.4% cheaper rate for a 25-year term, you'll save roughly £13,000 in interest over the life of the mortgage, plus roughly £55/month off your payment.
Combine this with our remortgage break-even calculator if you're considering switching mid-fix.