New research has identified an unusual reversal in expat buy-to-let mortgage pricing: the rate recorded for borrowing at 80% loan to value was lower than those recorded at 60% and 70%. The findings challenge the assumption that contributing a larger deposit will always secure a lower interest rate.
FORTO Finance’s research, reported by Mortgage Solutions on 20 October, recorded rates of 5.89% at 60% LTV, 5.99% at 70% and 5.70% at 80% on 28 September.
The movement was abrupt. Between 14 and 21 September, the monitored rates at 60% and 70% rose by 82 and 80 basis points respectively, while the increase at 80% was just one basis point.
These are historical market observations, rather than mortgage offers available today. Nevertheless, they raise an important question for internationally based investors: should the deposit be decided before the available borrowing has been properly compared?
For someone with substantial cash, the natural starting point may be to minimise the mortgage. That can remain a sensible choice. What the research challenges is the assumption that the interest rate will necessarily fall in a predictable sequence as the deposit increases.
What the Research Establishes
The reported figures show an unusual relationship between rates at different LTV levels during September. They do not establish that identical products, with identical fees and eligibility, were available to the same applicant.
The accessible reporting does not provide enough product-level detail to reconstruct a like-for-like quotation. The findings are a reason to investigate current options, rather than a recommendation to borrow more.
A Specialist Market Can Move Unevenly
FORTO attributes the reversal partly to the concentration of active lenders. Its research identified 46 lenders offering mortgages to British expatriates, with fewer than 20 actively developing their propositions.
That distinction matters. A long list of lenders does not necessarily produce a long list of suitable options for a particular borrower.
A British investor living in Dubai, receiving income through a consultancy and purchasing through a UK company presents a different application from an employed borrower living in France and buying personally. The appropriate comparison starts with the lenders that can consider the actual circumstances.
Where the relevant choice is limited, a pricing change by one lender can have a disproportionate effect on the options available. It is therefore possible for the relationship between LTV bands to become uneven without the whole mortgage market moving in the same direction.
For an applicant, this makes an old quotation a potentially weak basis for allocating capital. A deposit chosen around last month’s products should be checked against the products available when the transaction is ready to proceed.
A Lower Rate Can Still Produce a Higher Interest Bill
Consider a hypothetical expatriate purchasing a £750,000 UK rental property. A 40% deposit would be £300,000, leaving a £450,000 mortgage. A 20% deposit would be £150,000, leaving borrowing of £600,000.
Applying the historical rates solely to illustrate the arithmetic gives a result that is easy to miss in a headline: the larger loan has the lower percentage rate, but the higher annual interest cost.
| Measure | 40% deposit | 20% deposit |
|---|---|---|
| Cash deposit | £300,000 | £150,000 |
| Mortgage balance | £450,000 | £600,000 |
| LTV | 60% | 80% |
| Historical rate used | 5.89% | 5.70% |
| Annual interest | £26,505 | £34,200 |
| Monthly interest | £2,208.75 | £2,850 |
In this example, the smaller deposit retains £150,000 outside the property but increases annual interest by £7,695, or £641.25 a month.
Neither figure settles which arrangement is appropriate. The retained cash may have an important purpose, such as maintaining reserves or meeting other commitments. But describing the larger mortgage as “cheaper” would obscure the additional expense.
The borrower is choosing between different amounts of debt and different amounts of available cash. A lower percentage rate is one component of that choice, not the complete financial outcome.
An 80% Maximum Does Not Necessarily Require 80% Borrowing
There is another question to ask before changing the deposit: can the apparently better-priced product be used at the lower borrowing level?
A maximum LTV describes a ceiling. It does not, by itself, establish that a borrower must take the maximum loan. Individual products can have further restrictions, so eligibility needs checking rather than assuming either answer.
This is particularly relevant when interpreting research organised into LTV bands. The published comparison does not show whether the product behind the 80% figure could also have been available to an otherwise eligible borrower seeking 60%.
In the hypothetical example, if the 5.70% rate were available on the £450,000 loan, annual interest would be £25,650. That would preserve the larger deposit while reducing interest by £855 against the 5.89% calculation.
That is a mathematical illustration, not a claim about the underlying products. It demonstrates why reviewing product eligibility should come before recommending a change in leverage.
How Much Capital Should You Put Into Your UK Property?
Willow can compare suitable expat mortgage options against your intended deposit, country of residence, income and property plans, including the cost of retaining more cash outside the investment.
Explore UK Property Finance for Expats →Fees Can Change the Result Again
The research also brings attention back to product fees. An interest-rate advantage can be reduced or eliminated by a larger upfront charge, particularly where the borrower expects to refinance or sell relatively soon.
For scale, a hypothetical 2% fee on £600,000 is £12,000. The same percentage on £450,000 is £9,000. Increasing the mortgage can therefore increase both the interest bill and a percentage-based fee, even where the advertised rate falls.
The meaningful comparison uses the same assessment period and includes relevant product, legal, valuation, broker and exit costs. Incentives should be included where applicable, and fees added to the loan should be reflected in the balance and interest.
Willow’s recent analysis of Fleet’s shorter fixed-rate buy-to-let products explored this issue through the cost of a percentage product fee. The same principle applies here, although that article does not establish that Fleet’s products are suitable or available for any particular expat applicant.
For overseas investors, the comparison may also need to account for the timing and cost of converting deposit funds into sterling. A mortgage saving and a currency-conversion decision should be evaluated together without assuming future exchange rates will move favourably.
Retaining Cash Has Value, but So Does Lower Debt
An investor may want reserves for property repairs, periods without rent or commitments in their country of residence. Committing every available pound to the deposit can leave a well-capitalised purchase with an uncomfortable cash buffer.
Conversely, retaining cash by taking a larger mortgage increases the obligations the property must support. The retained money is matched by additional debt; it is not an increase in net wealth.
If rent is received in sterling and mortgage payments are made in sterling, those cash flows may align. Where a shortfall has to be met from overseas earnings, exchange-rate movements can still affect the cost of supporting the investment.
The decision should therefore begin with the purpose of the reserve. Funds allocated to essential expenditure deserve different treatment from money retained in the hope of earning a higher investment return.
A Deposit Decision Is Also a Risk Decision
On a £750,000 property, a £600,000 mortgage leaves £150,000 of equity. If the property value fell by 10% to £675,000 and the debt stayed unchanged, equity would fall to £75,000 before selling costs.
With a £450,000 mortgage, equity under the same scenario would be £225,000. This is not a forecast; it shows how higher leverage changes the investor’s exposure to a fall in value.
The Same Borrower May Face a Different Market at Refinancing
The initial mortgage also needs to be considered alongside the next financing decision. An overseas landlord may move country, change employment or alter the way the property is held before the fixed rate ends.
Those changes can affect which products are suitable to investigate. A loan that works at completion should not be assessed on the assumption that identical refinancing options will remain available indefinitely.
The rental position matters too. A lower initial rate does not automatically establish the borrowing a lender will accept, because the relevant rental assessment and wider underwriting requirements must still be met.
For portfolio owners, this becomes a question across several properties. Retaining cash on one acquisition might support another refinancing, but the combined commitments need to be visible. Otherwise, the same reserve can quietly become the assumed solution to several different risks.
The Practical Response Is to Compare Before Committing
The research gives expat investors a useful reason to revisit assumptions. It does not justify reducing deposits across the board, and it does not show that the September pricing relationship continues today.
A current review should establish the eligible lenders first, then compare realistic loan amounts and deposit levels. Where a lower rate appears in a higher-LTV product range, the first question is whether it can be accessed without increasing the loan.
Only then should the analysis move to the cost and purpose of retaining additional capital. The decision needs to work through the chosen fixed period and under a less favourable refinancing scenario.
For Willow, the value of the finding is the reminder that specialist borrowing deserves a fresh assessment of the actual application. An investor’s residence, income, available cash and plans for the property matter more than an assumption about how the rate table ought to look.
A larger deposit can still reduce debt, interest expenditure and exposure to falling property values. What it cannot safely be assumed to do is unlock the lowest available percentage rate without checking the products.
Frequently Asked Questions
Expat mortgage pricing, deposit choices and the September research.
Are the reported rates available today?
They are historical observations from September 2026, reported on 20 October. They are not current quotations or confirmation that a particular borrower qualifies.
Does a lower rate mean a smaller mortgage bill?
Not necessarily. The amount borrowed matters as well as the percentage rate. A larger mortgage can generate more interest even at a lower rate, before fees and other costs are considered.
Must I borrow 80% to use a product with an 80% maximum LTV?
Not necessarily. A maximum is a ceiling, but individual products may have further restrictions. Ask whether the product is available at your intended borrowing level before changing the deposit.
Can every British expatriate access the same products?
No. The assessment needs to consider the applicant’s residence, income, ownership structure and property against each lender’s current requirements.
What should an expat mortgage comparison include?
Compare eligible products using the proposed loan amount, deposit, fees, interest, fixed period, exit charges and refinancing assumptions. Also consider cash reserves and the risks of retaining more debt.