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Financial  Glossary of Finance Terms

Financial Glossary of
Finance Terms

Loan to Value - LTV

Loan to Value is the term used to indicate the value of the loan as a percentage of the property value.

For example if you require a £90,000 mortgage on a property of £100,000 then the Loan to Value is 90%. If you require £75,000 then the Loan to Value would be 75%.

Loan to Values are a key factor when lenders consider mortgage products as the higher the loan to value the higher the risk to the lender. This is because there is less equity and in the event of a repossession there is therefore less security should they have to sell the property.

The larger an applicants deposit the lower the loan to value and therefore the better rate offered.

 

 


 

 

 

 

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