What is Loan-to-Value (LTV)?
Loan-to-Value, almost always shortened to LTV, is one of the single most important numbers in UK mortgage lending. It expresses the size of your mortgage as a percentage of the property's value — put simply, how much of the property you're borrowing versus how much you're covering with your own deposit. A £250,000 property bought with a £50,000 deposit and a £200,000 mortgage has an LTV of 80%.
The formula behind this calculator
Where mortgage loan amount = Property value − Deposit
This calculator applies exactly this formula to your figures, instantly converting a property value and deposit amount into both the resulting loan amount and the LTV percentage, then places that percentage within the standard UK lending tier bands.
Why LTV matters so much to lenders
LTV is fundamentally a measure of risk. If a lender needs to repossess and sell a property to recover an unpaid mortgage debt, a lower LTV gives them a larger cushion — more equity value in the property relative to the outstanding loan — reducing the risk of the sale proceeds falling short of what's owed, even after accounting for selling costs or a fall in property values. This is precisely why lenders reward lower LTV borrowers (those with bigger deposits) with lower interest rates: statistically, they represent meaningfully lower risk across a lender's whole loan book.
How UK lenders structure LTV pricing tiers
Rather than pricing every LTV percentage individually, UK lenders typically organise their mortgage products into standard LTV bands — commonly around 60%, 75%, 80%, 85%, 90% and 95% — with a noticeable step down in available rates as you cross into a lower band. This means the difference between, say, a 91% LTV and an 89% LTV can be more significant for your rate than the two percentage points alone might suggest, because crossing that 90% threshold moves you into an entirely different, typically more competitive, pricing tier.
| LTV band | General characteristics |
|---|---|
| 60% or below | Typically the most competitive rates available |
| 60–75% | Strong rate availability, widely competitive |
| 75–80% | Good availability, slightly higher rates than lower bands |
| 80–90% | Fewer lenders, noticeably higher rates |
| 90–95% | Limited to specialist high-LTV products, highest standard rates |
Why understanding your LTV band matters before house-hunting
Knowing your likely LTV band before you start viewing properties helps set realistic expectations for both your mortgage rate and your monthly repayment budget. It can also reveal whether a modest increase in your deposit — even by a relatively small amount — might move you into a noticeably better pricing tier, potentially saving considerably more in interest over the mortgage term than the extra time needed to save that additional deposit amount.
LTV changes over time, not just at purchase
Your LTV isn't fixed forever — it typically improves over time as you pay down your mortgage capital and, potentially, as your property's value rises. This is particularly relevant when you come to remortgage: even without making any overpayments, several years of standard capital repayment combined with property value growth can move you into a meaningfully better LTV band than when you first bought, unlocking better rates at that point. It's always worth recalculating your current LTV before remortgaging, using your latest mortgage statement and a realistic current property valuation.
LTV and buy-to-let, second charge and remortgaging
LTV calculations apply just as directly to buy-to-let mortgages (see our buy-to-let mortgage rules guide), second charge mortgages, and remortgaging, though the specific LTV thresholds and typical rate bands can differ from standard residential lending — buy-to-let, for example, generally requires a lower maximum LTV (a bigger deposit) than residential purchases.
The bottom line
LTV is one of the clearest, most direct levers you have over your mortgage rate. Use this calculator to check exactly where your current deposit places you, and consider — where realistic — whether saving a little more before you buy or remortgage could move you into a meaningfully cheaper pricing tier. Pair this with our Stamp Duty calculator to get a fuller picture of your total upfront costs.