Your 50% LTV result explained
With a property value of £200,000 and a mortgage of £100,000, your loan-to-value is 50%. The remaining £100,000 is your deposit if you are buying, or your equity if you already own the property. That represents 50% of the property value.
A higher LTV means you are borrowing a larger share of the property's value. A lower LTV means you are contributing more deposit or have more equity. Lenders use this percentage when deciding which mortgage products, rates and lending limits may be available, but LTV is only one part of their assessment.
How to calculate loan-to-value
The standard calculation is:
Mortgage amount ÷ property value × 100 = LTV
Using your current figures:
£100,000 ÷ £200,000 × 100 = 50%
If you know the deposit rather than the mortgage amount, subtract it from the property value first:
Property value − deposit = mortgage amount
The calculator keeps all four figures linked. Change the property value, deposit or equity, mortgage amount, or LTV and the others update automatically.
How lenders use LTV bands
Mortgage products are commonly offered with maximum LTV limits such as 60%, 75%, 80%, 85%, 90% or 95%. The exact boundaries vary by lender, product, loan size, repayment method and property type.
Rounding your result up to the nearest five percentage points gives an indicative band of 50%. This is a useful planning guide, not a guarantee that a lender will use that exact band. If your LTV is just above a product boundary, a slightly larger deposit or smaller mortgage could move the application into a lower band and may change the products available.
Lower LTV products often have more competitive pricing because the lender has a larger equity buffer. This is not automatic: fees, credit history, affordability, property criteria and the wider application can still make another product more suitable.
Which property value will the lender use?
The calculator uses the property value you enter. A lender will make its own assessment.
For a purchase, the lender may calculate its maximum advance using the lower of the agreed purchase price and its mortgage valuation. If you agree to pay £200,000 but the lender values the property for less, the same £100,000 mortgage would produce a higher LTV. You might then need a larger deposit, a smaller mortgage or a different product.
A mortgage valuation is primarily for the lender's benefit and is not the same as a survey of the property's condition. Depending on the property and application, a lender might use an automated valuation model, a desktop valuation or a physical inspection.
For a remortgage, the lender will usually consider the current mortgage balance and its assessment of the property's current value rather than the original purchase price.
What is a good LTV?
There is no single good LTV for every borrower. A useful target balances:
- the mortgage products you may be eligible for
- repayments you can comfortably afford
- the deposit or equity available
- money needed for fees, moving costs, repairs and emergencies
Putting down every available pound solely to reach a lower band can leave too little financial flexibility. Equally, reaching a lower boundary may improve product choice or pricing. Compare the overall cost and keep affordability separate from LTV: a larger deposit does not guarantee that the required mortgage will pass a lender's income and expenditure checks.
Read our detailed guide to loan-to-value for more help planning a deposit, or see how much you may be able to afford to borrow.
Can you get a 95% LTV mortgage?
Some lenders offer residential mortgages up to 95% LTV, equivalent to a 5% deposit. Availability depends on the lender, property, loan size and applicant circumstances.
The UK Government's permanent Mortgage Guarantee Scheme is intended to support the availability of eligible 91% to 95% LTV mortgages through participating lenders. The scheme does not guarantee that an applicant will be accepted, and 95% products can have narrower criteria than lower-LTV lending.
Our guide to high loan-to-value mortgages explains the trade-offs when buying with a smaller deposit.
Purchases, remortgages and buy-to-let
Buying a home
Your deposit is the part of the purchase price you are contributing yourself. With the current figures, £100,000 is the deposit and £100,000 is the mortgage. Deposit source, affordability, credit history and property eligibility are assessed separately.
Remortgaging
The formula is unchanged, but the amount not mortgaged is normally described as equity rather than deposit. Regular capital repayments can reduce the balance, while changes in property value can move LTV either down or up. Use our remortgage calculators to explore the wider effect of changing rate, term and repayments.
Buy-to-let
Buy-to-let uses the same LTV calculation, but lenders also assess whether expected rent supports the borrowing under their rental stress test. Maximum LTV, interest coverage requirements and stress rates differ between lenders and products. Learn more about buy-to-let mortgage stress tests.
How can you reduce your LTV?
As a buyer, you may be able to reduce LTV by:
- saving a larger deposit
- choosing a less expensive property
- negotiating a lower purchase price
- borrowing less, where affordability and your plans allow
As a homeowner, LTV may fall when you repay capital or if the property value rises. You might also consider making an overpayment, but check the mortgage terms first because limits and early repayment charges can apply. Property values can fall as well as rise, so a future valuation is not guaranteed.
Loan-to-value FAQs
Is LTV the same as equity?
No. LTV is the mortgage expressed as a percentage of the property value. Equity is the property's value minus the mortgage balance. In your current example, the equity or deposit is £100,000, equal to 50%.
Can LTV exceed 100%?
Yes. If the mortgage balance is greater than the property's current value, the LTV is above 100% and the property is in negative equity. This calculator is designed for purchase, deposit and positive-equity scenarios, so its mortgage and LTV controls stop at the property value and 100%.
Does a lower LTV guarantee a lower mortgage rate?
No. It may open access to different products or pricing bands, but the final rate and suitability depend on the complete application, product fees and lender criteria.
Should you wait until you reach a lower LTV band?
That depends on the potential saving, how long it would take, property-price movement and your wider plans. Compare the total mortgage cost rather than focusing only on the headline rate or LTV number.
This calculator provides an estimate, not a mortgage offer. A lender's valuation, affordability assessment and lending criteria determine the LTV and mortgage options it will use.