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UK Calculators

Loan to Value (LTV) Calculator

Loan to value is the single number that most affects the mortgage rate you are offered. It expresses the amount you owe as a percentage of what the property is worth, so a smaller loan against a higher value means a lower LTV and usually a cheaper rate.

Enter the property value and the outstanding balance to see your LTV, the equity behind it, and how much you would need to repay to drop into the next lending band.

Last reviewed

Loan to Value (LTV) Calculator

Loan to value

75%

Equity in the property£62,500.00
Equity as a share of value25%
Nearest common lending band75% or below
Reduction needed for the next lower band£37,500.00 to reach 60%

Lenders price in bands, and the bands shown here are the common ones rather than a particular lender’s criteria.

Reading the result

LTV above 100% means the balance is larger than the property value, which is negative equity. The calculator shows this rather than hiding it, because it materially affects remortgaging options.

The band shown is the nearest common lending threshold. Crossing below a threshold such as 90% or 85% is typically where rates improve, which is why the reduction figure is worth knowing.

How it works

LTV is the balance divided by the property value, multiplied by 100. Equity is the value minus the balance, and equity as a percentage is simply 100 minus the LTV.

To find the reduction needed for the next band, the calculator works out the balance that would produce that band at the current value and subtracts it from your balance.

Worked examples

£187,500 owed on a £250,000 home

A homeowner wants to know whether they are within the 75% band.

  1. Divide £187,500 by £250,000 to get 0.75.
  2. Multiply by 100 for an LTV of 75%.
  3. Subtract the balance from the value for £62,500 of equity.

LTV of 75%, equity of £62,500, sitting exactly on the 75% band.

The default scenario on this page

Property value (£): 250000; Mortgage or loan balance (£): 187500

  1. LTV is the balance divided by the property value, multiplied by 100. Equity is the value minus the balance, and equity as a percentage is simply 100 minus the LTV.
  2. Equity in the property: £62,500.00
  3. Equity as a share of value: 25%
  4. Nearest common lending band: 75% or below
  5. Reduction needed for the next lower band: £37,500.00 to reach 60%

Loan to value: 75%

Assumptions

The result depends on the following. If any of them do not match your situation, treat the figure as indicative only.

  • The property value used is the figure a lender would accept on a valuation, not an asking price or an optimistic estimate.
  • The balance is the current outstanding amount, including any fees already added to the loan.

What this calculator does not do

  • Band boundaries differ between lenders, and some price at 60%, 65% or 70%. The bands here are illustrative rather than a lender’s product matrix.
  • A lender will use its own valuation, which can be lower than an estate agent estimate, pushing the effective LTV higher.
  • Shared ownership, help-to-buy equity loans and second charges change how LTV is assessed and are not modelled.

Methodology

A single division with a guard against a zero or negative property value, which is rejected rather than producing an infinite result. Balances above the property value are allowed and reported honestly as an LTV above 100%.

Frequently asked questions

What is a good LTV?

Lower is cheaper. Rates generally improve as you move below 90%, 85%, 80%, 75% and 60%, with the biggest single step usually at 60% or below.

Does overpaying improve my LTV?

Yes. Reducing the balance lowers the LTV immediately, and rising property values do the same without any payment. Both can move you into a cheaper band before your next remortgage.

What happens if my LTV is above 100%?

That is negative equity. Moving or remortgaging becomes difficult until the balance falls below the value, though some lenders offer product transfers to existing customers.

Please note: Results are estimates for general information only and are not financial, tax or legal advice. Figures depend on the assumptions listed on each page and on your personal circumstances.

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