LTV

What is Loan To Value (LTV)?

Loan to Value (LTV) is a credit slang term often used in mortgage finance. The LTV is a ratio - the amount of a mortgage expressed as a percentage of the value of the property’s value, or what you pay for the property. So if your get a mortgage with a max LTV of 90% and your property is worth £200,000 then the most you will be allowed to borrow is £180,000.

The higher the LTV, the more costly the mortgage, generally speaking. Consequently this can often tie in closely with affordability as this can restrict the maximum LTV available and therefore whether you can afford the new property.


Q: How is LTV calculated?

A: It is worked out as the mortgage amount compared to the value of the property at its present market value, as assessed by appraisal.

Q: How does it affect my mortgage?

A: The higher the LTV, chances are the longer you’ll be paying off the mortgage as it represents a higher amount to be repaid.

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