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Calculate your loan to value ratio instantly with our simple mortgage loan to value calculator.
The loan to value ratio (LTV) is the size of your mortgage in relation to the value of the property you’re buying or remortgaging.
LTV is expressed as a percentage: for example, if you’re buying a £100,000 house with a 20% deposit of £20,000, you’ll need a 80% LTV mortgage to borrow the remaining £80,000.
The easiest way to work out your LTV is to use our loan to value calculator which instantly calculates your LTV.
LTV is important because it affects the amount you can borrow, and the rate you can borrow at. The lower the LTV, the better the mortgage rates available to you.
You’ll usually need at least a 5% deposit to get a mortgage – this means getting a 95% LTV mortgage. But the best mortgage rates are usually reserved for those with at least a 40% deposit, or a maximum LTV of 60%.
Our loan to value calculator works by taking the value of the property you want to buy (or already own if you’re remortgaging) and the size of your deposit or mortgage amount. The calculator crunches the numbers to instantly calculate your loan to value ratio.
You can also use this LTV mortgage tool to calculate the size of deposit you’ll need to reach different LTV bands.
To use our loan to value calculator you simply need to:
However, remember this LTV calculator is designed to give you a snapshot of your borrowing circumstances. To get tailored advice, speak to a fee-free mortgage broker.
Calculating your loan to value ratio is important because it has a direct impact on the mortgage rates you’re able to get. Generally speaking, the lower your LTV the better. And lenders usually offer their best mortgage rates to people with a deposit of at least 40% (this is 60% LTV).
Conversely, if you have a smaller deposit – and therefore your loan to value ratio is higher – lenders will usually charge higher mortgage rates. This is because lenders will view you as riskier than someone who has more of their own money tied up in the house.
The lower your loan to value ratio, the wider your choice of mortgages will be. And you’ll usually have the widest choice of mortgage deals if your loan to value is 60% or lower.
But as a general rule:
| Property value | Deposit as £ | Deposit as % | Loan to value |
|---|---|---|---|
| £200,000 | £10,000 | 5% | 95% |
| £200,000 | £20,000 | 10% | 90% |
| £200,000 | £50,000 | 25% | 75% |
| £200,000 | £80,000 | 60% | 60% |
The pros of having a high LTV mortgage, typically 90% and above include:
But the disadvantages include:
Your LTV is influenced by various factors including:
The easiest way to find the best mortgage rate for you is to get expert, fee-free brokers L&C to do the hard work for you. You can start the process online to see the deals available to you or speak to an expert adviser at L&C now on 0800 073 2326.
L&C’s expert advisers will run you through the available mortgage options to make sure you’re getting the best deal possible.
L&C’s award-winning mortgage advice is FREE. No hidden costs, just great service. You can start your mortgage online to see the deals you qualify for and how much you can borrow or speak to an expert adviser at L&C now on 0800 073 2326.
Yes, 95% mortgages are widely available in the UK. Some lenders offer 95% LTV mortgages through the government’s Mortgage Guarantee Scheme but other lenders offer 95% LTV mortgages without using the scheme.
If you have a high loan to value ratio, expect mortgage rates to be higher than if you can put down a bigger deposit.
If you’re buying a house for £200,000 with a £10,000 deposit and need a £190,000 mortgage, you’ll have a 5% deposit and need a mortgage for the remaining 95% of the property’s value. This means you’ll need a 95% LTV mortgage.
Mortgage brokers – like the experts at L&C – will scour the market for you, looking for the right deal to suit your situation. You can use a mortgage broker to help with a remortgage even if you plan to stay with your existing lender. They are also particularly helpful if you are self-employed, buying a Buy to Let or think your situation is unusual in any way. They will know the lenders and deals that will work for you.
You’ll need a bigger deposit for a Buy to Let mortgage than a residential mortgage. You’ll usually need at least a 20% deposit, this means a maximum loan to value of 80%.
For example, if you want to buy a Buy to Let property for £200,000, and the maximum LTV mortgage you can get is 80%, you can borrow up to £160,000 on a mortgage and would need a deposit of £40,000.
The easiest way to work out your LTV is to use our loan to value calculator. See instantly how much your loan to value ratio is.
You can start the process of getting your mortgage or remortgage online to see the deals available to you or speak to an expert adviser at L&C now on 0800 073 2326. They are open 9-8 Mon-Thurs, 9-5.30 Fri, 9-5 Sat, 10-4 Sun.
Loan to value ratio (LTV) means the size of your mortgage compared to the value of your house. Loan to value ratio is expressed as a percentage. So if you buy a £100,000 with a 20% deposit of £20,000 and take out an 80% mortgage of £80,000, your LTV will be 80%.
You’ll usually get access to the best mortgage rates if you have an LTV of 60% or below. However, the lower your loan to value the better. So if your LTV is 75%, you may get access to better rates than if you have an LTV of 80% so on.
Your LTV is the size of your mortgage in relation to the value of your property. So if you’re buying a £400,000 house and have a 25% deposit of £100,000 and need a mortgage for the remaining 75%, your LTV is 75%. Calculate your LTV instantly with our loan to value calculator.
There are a number of ways to reduce your LTV including, saving a bigger deposit, buying a cheaper property, making mortgage overpayments and adding value to your property by carrying out home improvements.
Most mortgage lenders price their mortgages in LTV brackets, or bands, which are usually set at 5% intervals between 60% and 95%. Lenders usually offer lower mortgage rates for lower LTV mortgages as the borrower owns more equity in the property, reducing the risk to the lender.
80% LTV means the value of your mortgage is 80% of the value of your house. So if your house is worth £200,000, an 80% LTV mortgage would be £160,000.
LTV is important because it helps lenders assess the level of risk in giving you a mortgage. Generally speaking, the higher the LTV the riskier the lender will view you.
Our loan to value calculator works in the same way if you’re remortgaging.
When you’re using the LTV calculator, simply enter the amount of equity you have in your home rather than a deposit.
If you’re not sure how much equity you have in your home, just deduct your outstanding mortgage balance and any loans secured on your home off your home’s value. Or alternatively, use our handy mortgage equity calculator which will instantly show you the amount.
The easiest way to calculate loan to value is to use our loan to value calculator.
But if you want to work it out yourself, divide your mortgage amount by the value of the property then multiply it by 100.
For example, if you’re buying a £200,000 property and need to borrow £160,000, divide £160,000 by £200,000 and multiply it by 100 – this gives an answer of 80% LTV.
Having a low LTV is better because it means you own a greater proportion of your home and are borrowing a smaller amount on a mortgage. Plus, having a lower LTV means you’ll usually get access to a wider range of mortgage deals and at better rates too.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice. Mortgage service provided by London & Country Mortgages (L&C), Unit 26 (2.06), Newark Works, 2 Foundry Lane, Bath BA2 3GZ, authorised and regulated by the Financial Conduct Authority (FRN: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage. If you complete on a mortgage through L&C, L&C will be paid a commission by the chosen lender. L&C will share a percentage of this commission with HomeOwners Alliance, the referring third party. The commission L&C receives doesn’t affect the product or rate recommended to you.
