Mortgages - Loan to Value (LTV)

Loan to value (LTV)

This is the ratio of the mortgage that a provider will give you against the value of the property you are buying. When I was a lad, and all this was fields etc the maximum LTV that you could get was 80%, but now more and more providers are developing products that allow borrowers to have more on their mortgage than the value of the property the mortgage is secured on…how very strange, anyway, a LTV ratio of 130% means that for a £100,000 property the provider would be able to lend you £130,000, and an 80% LTV deal would give you £80,000 - and you would have to find the remainder of the property purchase price yourself, i.e. the deposit…better start saving then…

Broadly speaking lower LTV ratios are a lower risk to the mortgage lender, and can therefore be offered at a more attractive interest rate, meaning lower monthly payments. Some providers restrict the LTV depending on the type of property you are buying, for example if you are buying an ex–local authority house you may only be able to get 90% LTV and no higher. Deals and mortgage lender attitudes do change so in order to find out what the best deal is for you, you really should talk to a specialist mortgage adviser who should help you find the best product to meet your needs

Don't forget that however much you borrow the lender will expect to be paid whether you are able to pay or not – it makes sense to insure your mortgage payments, so that even if you cannot work through accident, sickness or unemployment your home is safe.

You can get a mortgage protection quote here.