Calculate your LTV ratio to understand your equity and what mortgage rates you may qualify for.
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This loan-to-value calculator works out your LTV ratio — the size of your mortgage compared with the value of the property — so you can see which mortgage deals you may qualify for. Enter the loan amount and the property value and it returns your LTV as a percentage. It is useful for home buyers, remortgagers and anyone judging how a bigger deposit could unlock cheaper rates.
LTV is calculated by dividing your loan amount by the property's value and multiplying by 100. So a £180,000 mortgage on a £200,000 home is 180,000 ÷ 200,000 × 100 = 90% LTV. The remaining share is your equity or deposit, in this case 10%.
Lenders use LTV as a risk gauge: the more you borrow relative to the property's worth, the more exposed the lender is if prices fall, so higher-LTV loans usually carry higher interest rates. Bringing your LTV down — through a larger deposit, overpayments or rising property values — typically opens up better deals.
LTV is the ratio of your loan amount to the property value, expressed as a percentage. A £180,000 mortgage on a £200,000 property is 90% LTV, meaning you are borrowing 90% and putting in 10% as a deposit.
In the UK, around 60% LTV typically gets the best rates. In the US, 80% LTV avoids Private Mortgage Insurance (PMI). A lower LTV means less risk for lenders, which usually translates into better rates for you.
You can reduce LTV by making a larger deposit, overpaying your mortgage, or benefiting from rising property values. A lower LTV can give you access to cheaper mortgage deals when you buy or remortgage.
Generally yes for the interest rate, because lenders price lower-LTV loans more cheaply. That said, tying up all your cash in a bigger deposit may leave you short of emergency savings, so balance a lower LTV against keeping a comfortable financial cushion.