What does 'Loan to Value' mean when buying a property?
Find out what Loan to Value means when you are buying a property. 'What does Loan to Value mean?' plus over 150 other property related terms and jargon in plain English
Loan to Value
A mortgage lender will consider Loan to Value (LTV for short) when looking at a mortgage application.
The figure is expressed in percentage terms as the amount of the property value they will be funding versus what you are putting down.
So if the property is worth £200,000 and you need a mortgage of £180,000 your loan to value is 90% - (£180,000/£200,000) * 100.
The higher your LTV the more risky the loan is for the bank as the property market only needs to move down a little for the property price to be less than the mortgage loan. That means the higher the LTV, the higher the interest rate they will want you to pay.
To find out more about the smart way to sort a mortgage pick up a copy of my ebook How to Really Buy a Property.
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- Agreement in Principle
- Repossession
- Surveyor
- Tenanted Property
- Title Deeds
- Negative Equity
- Equity
- Lifetime Mortgage
- Cash Buyer
- Loan to Value
- LTV
- Credit Rating
- Survey Sent to Panel
- Survey Requested
- Survey Instructed
- Survey Booked
- CML Handbook
- Pre Arranged Mortgage
- Financial Adviser
- Independent Financial Adviser (IFA)
- Bridging Loan
- Credit Check
- Credit Agency