LTV (Loan to Value) Calculator
LTV (loan to value) is a measurement of the ratio of what you would like to borrow to the value of your property.
For example, if your property was valued at £100,000 and you required a mortgage of £50,000 on this property your LTV would be 50%, or in other words the amount you want to borrow would be 50% of the value of the property.
Our LTV calculator allows you to quickly work out an LTV estimation based on your estimated property value and current mortgage balance. If you’re considering remortgaging to raise capital against the equity in your home you can also enter an additional borrowing amount. This is particularly useful if you’d like to know how much additional borrowing you can make without raising your LTV over a certain ratio.
Why is LTV important?
LTV is a key risk indicator to lenders. The higher the LTV ratio the less likely it is the lender will recover the full outstanding mortgage balance if the borrower defaults.
As LTV rises lending becomes more risky and so product availability reduces and interest rates rise to reflect this additional risk to the lender. In some cases a lender may even impose an additional insurance on the borrower to protect the loan further from default.
It’s important to remember that your LTV is not a static figure. As house prices rise and fall so does the LTV ratio. This is why in a falling or stagnant market lenders will often give themselves some margin in case house prices drop. There are very few mortgage products available for people with LTVs over 90% at the moment and this is a direct result of market conditions.
Using our LTV calculator
Simply enter your details into the fields; you don’t need to worry about entering anything into the additional borrowing field if you’re not planning to borrow anything extra.
We’ll then calculate an estimated LTV based on these details. You can change the figures and make as many calculations as you’d like. If you’d like to compare mortgage rates available at a particular LTV simply complete the short form under the calculator.
Please remember, the results are only an estimate. The final LTV will be based on what a lender values your property at; this may be more or less than your estimate and so will impact your LTV.