Loan-to-value (LTV) calculator
Your LTV, the pricing band it puts you in, and what nudging down is worth.
Lenders price in steps at 95/90/85/80/75/60% LTV, so a small extra deposit that tips you over a threshold can cut your rate for years. The tier rates above are illustrative, not live quotes; monthlies assume a 25-yr repayment loan. Illustration only, not financial advice.
Loan-to-value is the loan as a percentage of the property’s value: borrow £225,000 against a £250,000 home and you are at 90% LTV. It is the single number that most affects the rate you are offered, because it measures the lender’s cushion if prices fall and they ever have to repossess and sell.
Pricing moves in steps, not smoothly. The standard bands are 95%, 90%, 85%, 80%, 75% and 60%, and crossing one re-prices the whole loan: the gap between a 90% and an 85% deal is often 0.2–0.4 percentage points, worth £25–£50 a month on a typical loan. This is why finding a few thousand pounds more deposit — or negotiating a few thousand off the price — can be worth far more than it looks: £6,250 moves a £250,000 purchase from 90% to just under 87.5%, and £12,500 gets you to 85% and a cheaper band.
Two things worth knowing. First, the lender lends against their surveyor’s valuation, not the price you agreed — a down-valuation raises your effective LTV and can knock you into a worse band or shrink the loan. Second, LTV falls over time as you repay and (usually) as the home appreciates, so each remortgage is a chance to drop a band: it is common to buy at 90% and remortgage at 75% five years later, with the rate improving each step.
Common questions
What is a good LTV for a mortgage?
The best pricing sits at 60% LTV and below; 75–80% still gets very competitive rates; 90–95% pays a visible premium because the lender’s cushion is thin. There is no “bad” LTV — 95% mortgages exist precisely so people can buy sooner — but each band you drop is worth real money every month.
How do I lower my LTV?
Three levers: a bigger deposit, a lower purchase price, or a higher valuation (which you don’t control). After buying, overpayments and house-price growth both lower it — check your LTV before every remortgage, because dropping from 76% to 74.9% moves you into a cheaper band for the entire next deal.
What happens if the lender values the property below my offer?
A down-valuation means the lender bases the loan on their figure, not yours. Either you find the shortfall in cash, renegotiate the price (the valuation is decent evidence), or the LTV rises and the deal re-prices. It is one of the better reasons to avoid bidding far above the local evidence.
Does LTV matter after I’ve bought?
Yes — at every remortgage. Repayments plus price growth typically pull LTV down a band or two within a few years, unlocking cheaper deals. In a falling market the reverse can happen; at the extreme, negative equity (LTV above 100%) makes switching lenders impossible until the balance or the market recovers.
Numbers are half the story. Check the home itself.
One search pulls the official record on any address in England & Wales — value, flood risk, schools, noise and more, scored 0–100.