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12 Aug 2022

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125 % Mortgages Explained

125 % Mortgage

125% LTV mortgages are no more 22/02/2008

“At the end of last week there were six providers offering 125% mortgages; now there are none. Birmingham Midshires Solutions has become the last lender to pull out of this area of the market. Read more

125 % Mortgages and remortgages have been common place for a number of years.

There are now more mortgage lenders than ever offering 125 % mortgages and remortgages. Including Northern Rock, Mortgage Express and now BM Solutions.

This means you can now borrow up to 125 % of the property value without having to take a secured loan with another lender at possibly a higher APR.

Who can have a 125% mortgage ?

125% mortgages are available to first time buyers, next time buyers or someone wishing to release the equity in their home, by remortgage, without moving house.

How does a 125% mortgage work?

125 % mortgages consist of a mortgage for 90% or 95% of the value of the property with an unsecured loan for the balance of the borrowing. Both of mortgage and loan are available at the same interest rate whilst they are linked. Its important to remember that the unsecured element of the mortgage would not be regulated by the FSA. ( A mortgage higher lending fee may be charged by the lender please check the details in the fee section in the full product details or ask your Financial Advisor). Some 125 % mortgage lenders do not charge a mortgage indemnity premium due to way that a 125 % mortgage is made up i.e. a mortgage and secured loan.

Disadvantages of a 125% mortgage

125 % mortgages are charged at a higher rate of interest than mortgages where you put down a deposit but can be very useful for first time buyers or if you are purchasing a property that requires some improvements.

125% & 115% Mortgage & Remortgage Quotes

Due to the way that a 125% mortgage is made up of a mortgage and unsecured loan Go Directs online mortgage calculators cannot show you payments on a 125% mortgage. Go Financial Services can prepare you a personalised illustration for a 125% mortgage or remortgage with the following mortgage lenders

Mortgage Lender



125% Mortgage Quote

Accord No Yes
Alliance & Leicester Yes Yes
BM Solutions Yes Yes
Coventry B S Yes Yes
Northern Rock Yes Yes


125% Bad Credit / Adverse Mortgages & Remortgages

There are some lenders that now offer mortgages and remortgages for people with a bad credit history, subject to credit score. The typical criteria for 100 % plus bad credit mortgage is

CCJ's/ Defaults

  • 1 satisfied CCJ or Default up to £250 in last 2years.
  • 2 satisfied CCJ's or Defaults up to £500 in last 2 to 6 years.

Other Arrears (Unsecured loans and credit cards)

  • 3 months arrears in last year.
  • Arrears occurring more than I year ago ignored.


  • Discharged more than 6 years ago.


  • Satisfied more than 6 years ago.

Mortgage / Rent Arrears

  • 1 month in last year.
  • 2 months in the last 3 years.


  • Not allowed.

Bad Credit mortgages/ccj mortgages/mortgage arreas mortgages.

The overall cost for comparison is 5.2% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration. Rate correct as of 12/09/2014

Do you want fee free 125% mortgage advice?

For advice on 125 % mortgage or remortgages please feel free to speak to our mortgage advisors, just complete the mortgage advice enquiry form and a professional mortgage advisor will contact you.


You may also be interested in:

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500


Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500