The size of the mortgage as a percentage of the property’s value.
Loan to Value or LTV is the mortgage size calculated as a percentage of the property value. Most lenders use this percentage as part of their product pricing, charging a higher rate of interest as the loan to value increases.
For example, you may initially apply for a product that will lend up to a loan to value of 75% and find that your property is not worth what you thought and that your loan to value has increased to 77%. This will mean either changing product (potentially paying a higher rate of interest) or reducing the loan so that it falls back to 75% (in the case of purchase this will mean you pay more deposit).
Read more about Loan to Value and try out our online calculator.
