LTV Explained Simply | MoneyTranslator

Plain English

LTV stands for Loan-to-Value ratio. It expresses your mortgage as a percentage of the property's value. A lower LTV generally means less risk for the lender and lower interest rates for you. LTV = (loan amount divided by property value) x 100.

Real-world example

You buy a £300,000 house with a £45,000 deposit. Your mortgage is £255,000, giving an LTV of 85%. To get below 80% you'd need a £60,000 deposit. That extra saving could unlock a noticeably better rate.

Numbers simplified for illustration. Actual rates and tax rules may change.

Common mistake

People think LTV only affects whether they get approved. In reality, dropping from 90% to 85% LTV can save thousands in interest over the mortgage term.

LTV Calculator

Property value (£)

Mortgage / loan amount (£)

Your LTV 85.0%

Your equity £45,000

Next LTV bracket £15,000 more equity needed (to reach 80% LTV)

LTV brackets typically sit at 60%, 75%, 80%, 85%, 90%, and 95%. Lower LTV generally means better mortgage rates. Lenders set their own rate tiers and criteria — this is an illustrative guide only. Always get a personalised illustration from a lender or broker.

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