Glossary · UK
What is LTV (Loan-to-Value)?
Mortgage as a percentage of property value — determines mortgage rate.
Full Definition
LTV (Loan-to-Value) is the ratio of mortgage debt to property value. 95% LTV = 5% deposit + 95% mortgage. UK mortgages are tiered by LTV: 95% LTV gets the worst rates (highest risk for lender), 60% LTV gets best rates. Each 5% LTV band typically reduces the rate by 0.1-0.3%. As you pay down capital and property values rise, your LTV falls — remortgage to a lower LTV band to save thousands. Typical 2025 rate spread: 95% ~5.5%, 60% ~4.0%.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.