Step 2: Calculate your LTV

 

Do you know the value of your property?

Understand how your Loan-To-Value can reduce your monthly mortgage payments.

 

What is Loan-to-Value (LTV)?

 

Loan-To-Value relates to the ratio used in mortgage lending to determine the percentage of your borrowing compared to the value of the property. Typically, the higher the LTV% is the higher the risk is to the lender usually resulting in a higher interest rate.

 

How do I calculate my LTV%?

 

Easily calculate the LTV ratio of your property following this formula:

 

LTV ratio = Mortgage Amount/Property ValueX100

 

If you divide the mortgage amount (amount borrowed) by the property's value this will give you the LTV as a percentage. For example, if a property is worth £250,000 and you put down £30,000 deposit the mortgage amount to be borrowed would be £220,000. Doing the calculation above will give you the result of an 88% LTV.

 

Try and work out your LTV%