Loan to value (LTV) is the size of your mortgage as a percentage of your property’s value. Borrow £380,000 against a £400,000 home and your LTV is 95%.
Lenders look at your LTV before they decide whether to lend, how much to offer and what rate to charge. A lower LTV means less risk for the lender and usually brings cheaper deals.
You will see the LTV ratio when you buy, remortgage or release equity. This guide shows how to calculate LTV, what a good loan to value ratio looks like and how to bring your own figure down.
What does loan to value mean?
Loan to value means the amount you borrow compared with what the property is worth, shown as a percentage. People often call it the loan-to-value ratio or just the LTV.
You will come across it as a first-time buyer and again each time you remortgage.
The part of the property you own outright is your equity. On a 90% LTV mortgage, you have 10% equity. Your deposit is your starting equity, and it grows as you repay the loan or as the property gains value.
More equity gives you a cushion. You have more choice if you need to sell, borrow more or switch deals.
Loan to value key figures at a glance
These figures show where UK lending sits today and why your own LTV matters.
| Figure | Value | Period | Source |
|---|---|---|---|
| Share of mortgage lending above 90% LTV | 8.4% | Q2 2026 | FCA mortgage lending statistics |
| Share of mortgage lending above 75% LTV | 47.5% | Q2 2026 | FCA mortgage lending statistics |
| Share of mortgage lending above 95% LTV | 0.5% | Q2 2026 | FCA mortgage lending statistics |
| Average UK house price | £273,000 | July 2026 | UK House Price Index |
| Effective rate on newly drawn mortgages | 4.60% | August 2026 | Bank of England Money and Credit |
How do you calculate LTV in the UK?
To calculate LTV, divide your mortgage by the property’s value, then multiply by 100.
For example, say you want to buy a £400,000 home with a £380,000 mortgage. £380,000 divided by £400,000 is 0.95. Multiply by 100 and your LTV is 95%. Your £20,000 deposit is the other 5%.
The same sum works when you remortgage. Use the amount you still owe and a current valuation of your home.
For example, say your home is worth £600,000 and you owe £420,000. £420,000 divided by £600,000 is 0.7. Your LTV is 70%.
Try your own numbers in our loan to value calculator below.
The table shows how the size of your deposit changes your LTV on a £500,000 purchase.
| Deposit | Mortgage | LTV |
|---|---|---|
| £25,000 (5%) | £475,000 | 95% |
| £50,000 (10%) | £450,000 | 90% |
| £75,000 (15%) | £425,000 | 85% |
| £125,000 (25%) | £375,000 | 75% |
| £200,000 (40%) | £300,000 | 60% |
Lenders work out LTV from their own valuation. If it comes in below the price you agreed, they usually base the loan on the lower figure. Your LTV then goes up.
LTV Calculator
This simple calculator will quickly work out your loan to value (LTV) percentage. Just enter the property value, or purchase price, and the mortgage amount you need.
Why does LTV matter to lenders?
Lenders use LTV to measure risk. A low LTV means the property can lose a lot of value before the lender is at risk of losing money.
Higher LTV lending is now common. FCA figures show 47.5% of mortgage lending in the second quarter of 2026 was above 75% LTV, the highest share since 2007. In the same quarter, 8.4% of lending was above 90% LTV, the highest since 2008.
Lenders will lend at these levels, but they price the extra risk into the rate.
The government also backs high LTV lending.
GOV.UK says its permanent Mortgage Guarantee Scheme, available from July 2025, aims to sustain the supply of 91% to 95% LTV mortgages. Our guide to 95% LTV mortgages explains how they work.
How does LTV affect your mortgage rate?
A lower LTV usually means a lower interest rate.
Lenders often price their deals in LTV bands that rise in steps of 5%, such as 95%, 90%, 85%, 80% and 75%.
The Bank of England reports an effective rate of 4.60% on newly drawn mortgages in August 2026. That figure covers every borrower. Your own rate depends on your LTV, your deal and your lender.
Bands can work in your favour.
For example, say you buy a £500,000 home with a 9.5% deposit of £47,500. Your mortgage is £452,500, which is an LTV of 90.5%. That sits in the 95% band.
A deposit of £50,000 is 10%. It takes you to 90% LTV and into a cheaper band. An extra £2,500 could cut your rate. Rates change often. Ask a broker to check the bands your lender uses.
Some lenders also add a higher lending charge at the top end, often above 90% LTV at the time of writing. Check your mortgage offer for it. A lower LTV also helps your monthly repayments.
What is a good loan to value ratio?
A good loan to value ratio is the lowest one you can reach without draining your savings.
A lower LTV usually brings a lower rate and the very best ones sit around 40-50% LTV.
Lenders price their best deals at the lowest LTV bands because they take less risk. A broker can show you how the rate changes at each band when you apply.
A 75% LTV needs a 25% deposit and opens up lower rates. At 90% or 95% you have fewer choices and pay more. Many people still buy this way, and it works well with a sensible plan.
What is the maximum loan to value?
The maximum LTV depends on the lender and the type of mortgage. For most home buyers, 95% is still the usual ceiling, which means a 5% deposit. The FCA's lending statistics show that only 0.5% of mortgage lending in the second quarter of 2026 was above 95% LTV.
A small number of lenders now go higher. At the time of writing in October 2026, you can find mortgages at 98% and even 100% LTV.
Buy-to-let lenders usually set lower limits. MoneyHelper's June 2026 guidance says you will generally need at least 25% as a deposit or equity, which is around 75% LTV. Some 80% to 85% LTV buy-to-let offers exist, but they can be hard to get without an established portfolio.
Bridging and commercial lenders also tend to lend less against the property. At the time of writing in October 2026, limits of 65% to 75% LTV are typical.
What happens to your LTV if house prices fall?
A high LTV leaves little room if your home loses value.
For example, say you buy a £500,000 home with a £475,000 mortgage. That is 95% LTV. If the value falls 10% to £450,000, you owe £25,000 more than the home is worth. Your LTV becomes 105.6%.
This is negative equity.
Prices differ by area. The UK House Price Index shows the average UK price rose 1.4% in the 12 months to July 2026. London prices fell 3.3% over the same period. So a rising national average does not protect every owner.
How can you lower your LTV?
Four steps can bring your LTV down. Some work before you buy and others work while you own the home.
Save a bigger deposit
The more you put down, the less you borrow. A larger deposit lowers your LTV and can open up better rates. Our deposit guide covers how much you may need.
Buy a cheaper property or negotiate
A lower price means a smaller mortgage for the same deposit. Even a small reduction can move you into a lower band.
Overpay your mortgage
Overpaying your mortgage cuts what you owe faster. For example, say your home is worth £600,000 and you owe £420,000, which is 70% LTV. Overpay by £30,000 and you owe £390,000. Your LTV falls to 65%.
Check with your broker how much you can overpay each year without a charge.
Remortgage when your home value rises
On a repayment mortgage, your balance falls every month. If prices have also risen, your LTV drops faster.
For example, say you bought a £500,000 home with a £450,000 mortgage, which is 90% LTV. Years later you owe £400,000 and the home is valued at £550,000. Your LTV is now about 73%. That lower LTV could unlock cheaper deals when you remortgage.
Speak to a mortgage broker about your LTV
Your LTV decides which deals you can get. Check your figure before you commit to a property.
Respect Mortgages is not a mortgage broker and cannot arrange mortgages or give advice. We can introduce you to an independent, whole of market mortgage broker. They can check which LTV band you fall into and compare suitable deals across the market.
Frequently Asked Questions
An 80% LTV means your mortgage is 80% of the property's value and you have a 20% deposit or equity. For example, a £500,000 home with a £400,000 mortgage is 80% LTV. Many lenders price their deals in LTV bands, and 80% is a common cut-off for a cheaper rate.
LTV stands for loan to value. It compares the size of your mortgage with the value of the property and shows the result as a percentage. Lenders use it to judge risk and to decide which products and interest rates they can offer you. You may also see it written as the LTV ratio.
Divide your mortgage balance by your property's value, then multiply by 100. For example, a £450,000 mortgage on a £600,000 home gives 0.75. Your LTV is 75%. When you remortgage, use what you still owe and a current valuation. Our loan to value calculator does the sum for you.
A lower LTV is better because lenders see less risk and usually offer lower rates. For the very best deals you need a deposit or equity of at least 50%.
Lenders use their own valuation. If it matches the price, your LTV is the same either way. If it comes in lower, the lender usually bases the loan on the lower figure and your LTV rises. You may then need a bigger deposit, a lower price or a different lender.
A 100% LTV mortgage lends the full price of the property, so you pay no deposit. You still need cash for solicitor fees, surveys and moving costs. You also start with no equity.
