Loan-to-value (LTV)
Loan-to-value (LTV) is the percentage of a property’s value that you borrow as a mortgage. Lower LTV often means better rates.
Last verified: 10/03/2026
Definition
Loan-to-value (LTV) measures how much you’re borrowing as a percentage of the property’s value (or purchase price, depending on the context).
How to calculate LTV
LTV (=) (mortgage amount ÷ property value) × 100
Example
- Property price: £300,000
- Deposit: £30,000
- Mortgage: £270,000
LTV = £270,000 ÷ £300,000 × 100 = 90% LTV
Why LTV matters
LTV can affect:
- which mortgage products you can access
- the interest rate you may be offered
- how strict the lender’s criteria can be
In general, lower LTV means lower lender risk, which can translate into better pricing. (This is not guaranteed; product pricing changes over time.)
Practical tip
When comparing “deposit options”, compare the LTV bands you land in (e.g. 95%, 90%, 85%, 80%), because a small extra deposit can sometimes move you into a cheaper band.
Related terms
- Deposit
- Mortgage repayment