LTV Calculator
Calculate your loan-to-value ratio and see how it affects your mortgage rates and options.
What Is LTV?
Loan-to-value (LTV) is the ratio between the size of your mortgage and the value of your property, expressed as a percentage. For example, if your property is worth £300,000 and your mortgage is £225,000, your LTV is 75%. The remaining 25% is your equity — the portion of the property you own outright.
Why Does LTV Matter?
LTV is one of the most important factors lenders use when deciding what mortgage rate to offer you. A lower LTV means you have more equity in your property, which reduces the lender's risk. As a result, borrowers with lower LTVs are typically offered lower interest rates and have access to a wider range of mortgage products.
How Does LTV Affect Mortgage Rates?
Mortgage rates are generally structured in LTV bands. You will usually see noticeable rate improvements at key thresholds such as 90%, 85%, 80%, 75%, and 60% LTV. Even a small reduction in your LTV — for example, moving from 76% to 75% — can unlock significantly better rates and save you thousands of pounds over the life of your mortgage.
How Can You Improve Your LTV?
There are several ways to lower your LTV and access better mortgage deals. You can increase your deposit when purchasing, make overpayments on your existing mortgage to reduce the outstanding balance, or benefit from property value increases over time. When remortgaging, it is always worth getting an up-to-date valuation, as rising property values may have reduced your LTV since you last borrowed.
Frequently Asked Questions
What is LTV?
LTV stands for loan-to-value. It is the percentage of your property’s value that is covered by your mortgage. For example, if your home is worth £200,000 and your mortgage is £150,000, your LTV is 75%. The remaining 25% is your equity.
What LTV do I need for a mortgage?
Most lenders require a minimum of 5% equity, meaning a maximum LTV of 95%. However, the best rates are typically available at 60% LTV or below. The lower your LTV, the more competitive the rates you can access.
How does LTV affect my mortgage rate?
Lenders price mortgage rates in LTV bands. Lower LTVs represent less risk for the lender, so they offer lower interest rates. Key thresholds where rates tend to improve are 90%, 85%, 80%, 75%, and 60% LTV.
Can I improve my LTV?
Yes. You can improve your LTV by making a larger deposit when purchasing, making overpayments on your mortgage, or benefiting from property value growth. When remortgaging, a new valuation may show that your property has increased in value, lowering your LTV.
What is the maximum LTV I can get?
Most UK lenders offer a maximum LTV of 95%, meaning you need at least a 5% deposit. Some specialist products may differ, but 95% is the standard maximum for residential mortgages. Buy-to-let mortgages typically have a maximum LTV of 75%.
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