LTV (Loan to Value)
Definition
The ratio of your mortgage to the property's value, expressed as a percentage. For example, a £180,000 mortgage on a £200,000 property is 90% LTV. Lower LTV ratios unlock better interest rates. Key thresholds: 95% (maximum most lenders offer), 90%, 80%, 75%, and 60% (best rates).
Why it matters
Your LTV ratio directly determines the interest rate you'll be offered — and therefore your monthly payments. Each threshold (95%, 90%, 85%, 80%, 75%, 60%) unlocks better rates. Knowing where you sit helps you decide whether saving a little more deposit is worth the wait for a cheaper rate.
Frequently asked questions
What is a good LTV for a mortgage?
The best rates are typically available at 60% LTV, but most buyers see a significant improvement at 75% or 80%. Anything at or below 80% LTV is generally considered a good position. First-time buyers often start at 90–95% LTV, which carries higher rates but lower deposit requirements.
How do I calculate my LTV?
Divide your mortgage amount by the property value and multiply by 100. For example, a £180,000 mortgage on a £200,000 property is (180,000 ÷ 200,000) × 100 = 90% LTV. Your deposit is the inverse: 10% in this case.
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