What Is Loan-to-Value (LTV), and How Does It Affect Your Mortgage Options?

When you’re navigating the home-buying process, one term you’ll come across often is Loan-to-Value, or LTV. Understanding LTV is essential, as it plays a big role in how much deposit you’ll need, what mortgage rates you’ll be offered, and how many lenders will be open to you.

What Is Loan-to-Value (LTV)?

Loan-to-Value (LTV) is the percentage of the property price you borrow compared to the overall value of the home. The formula is simple: LTV (%) = (Mortgage Amount ÷ Property Value) × 100. For example, if you buy a property worth £200,000 with a £180,000 mortgage, your LTV is 90%. If you put down a larger £50,000 deposit and borrow £150,000 instead, your LTV drops to 75%.

Why Does LTV Matter?

Your LTV tells lenders how much risk they’re taking when they lend to you. The lower your LTV, the less risky you appear, which usually means you’ll be offered more competitive mortgage rates.

It also affects how much deposit you’ll need to save and whether you qualify for certain products. For instance, 95% LTV mortgages are available for those with a small deposit, but they come with fewer options and higher rates compared to 90%, 85% or 75% LTV bands. Every step down in LTV can make a big difference to your monthly repayments and the total interest you pay over the life of the mortgage.

How to Lower Your LTV

There are three main ways to reduce your LTV: save a bigger deposit, consider a lower-priced property, or, if you’re remortgaging, increase your property’s value through home improvements. Even a small shift to a lower LTV band can unlock thousands in savings over time.

How Turtle Mortgages Can Help

At Turtle Mortgages, we specialise in helping first-time buyers and homeowners understand how LTV works and how to use it to their advantage. With access to over 90 lenders, we can match you with the most competitive mortgage options, whether you’re starting at 95% LTV or aiming to move lower. We provide personalised advice, clear guidance, and never charge our clients any fees.

Sounds good, right? All you need to do is book a call with us.