Glossary · UK
What is Loan-to-Value (LTV)?
The ratio of a mortgage loan to the property's value, expressed as a percentage, used by lenders to price and assess risk.
Full Definition
Loan-to-value, or LTV, is the size of a mortgage expressed as a percentage of the property's value or purchase price. For example, a GBP 180,000 mortgage on a GBP 200,000 home is a 90 per cent LTV, with the remaining 10 per cent covered by your deposit. LTV is one of the most important figures in UK mortgage lending because it measures the lender's risk: the more you borrow relative to the property, the higher the risk if prices fall. Lower LTVs generally unlock cheaper interest rates, as lenders reserve their best deals for borrowers with larger deposits, often at 60 per cent LTV or below. As you repay capital and as property values change, your LTV falls, which can let you remortgage onto a better rate. High-LTV loans, such as 90 or 95 per cent, are available but typically carry higher rates. Use a mortgage calculator to see how your deposit affects the LTV and monthly cost.