24 Hour Loans glossary of financial terms

Loan to Value (LTV)

Loan to value (LTV) is a term used in the mortgage industry. It is used to describe the actual amount that you borrow from a lender when you buy a property once your deposit has been taken into consideration. It is generally expressed as a percentage figure.

So, if you take out a mortgage for ?100,000 and put down a deposit of ?5,000 then you will be borrowing ?95,000 from your lender for your mortgage. Your loan to value will therefore be expressed as 95% LTV. This percentage will be of most use to most consumers as they go through the initial decision making processes when they choose a mortgage lender/and or mortgage product. Each lender will have their own loan to value rules ? so some may allow you to borrow to a maximum LTV of 95%, some may only allow LTV of 90%+ and some may even offer 100% LTV mortgages. It?s quite common for lenders to set lower LTVs for certain special deals or mortgage types. Some consumers may also be restricted in the LTV they can apply for if they have particular personal circumstances.