A loan-to-value (LTV) calculator provides a snapshot of how much equity you have in your property and is particularly useful when you’re considering remortgaging.
Below you’ll find one that’s free and easy to use, learn how the calculations may differ depending on the type of mortgage you have and what to do once you have this information.
This calculator will tell you what your loan-to-value (LTV) ratio is, based on the property's value, your deposit/equity and the amount you're borrowing.
Your LTV is
This means that most mortgage providers will consider your deposit amount to be more than satisfactory, but speaking to a broker is still recommended to ensure you get the best deal.
This means you’re likely to meet the deposit requirements at most lenders, but since many reserve their best rates for those with higher deposits, speaking to a broker is recommended.
Many mainstream mortgage providers would consider this high and be reluctant to lend. Applying through a mortgage broker may be necessary to find a specialist low deposit mortgage lender.
LTVs have a direct impact on the rates available to you - speak to a mortgage broker and find out how to get the best deal based on your ratio.
How to calculate your loan-to-value for a mortgage or remortgage application
To work out your loan-to-value (LTV) ratio simply divide your mortgage loan amount by the value of your property and multiply by 100 to express as a percentage. So, for example if your property (or the one you’re looking to buy) is worth £200,000 and the mortgage is £150,000 then the LTV would be 75% (£150,000 / £200,000 x 100).
Whether you’re looking to remortgage or move home the LTV is a key indicator for all the mortgage interest rate deals available across the market as most rates are typically bracketed into different LTVs – with the best deals usually reserved for the lowest ratios.
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How this calculator works
Our loan-to-value ratio calculator is very straightforward and simple to use.
No personal details are required, all you need to input is:
- The value of your property / purchase price
- Amount of the mortgage (either the outstanding balance if remortgaging or loan required)
And that’s it! The calculator will then show you the LTV, based on the figures you’ve inputted. If you’re unsure how much deposit/equity you may have you can simply keep re-inputting different amounts until you know the exact amounts.
Are the calculations any different for buy-to-let?
No, not at all. The calculations, as explained above, will be the same regardless of whether you have a residential or buy-to-let mortgage.
If you’re looking to either remortgage or purchase a property as a buy-to-let investment, it’s worth noting that lending criteria will usually involve a lower LTV (typically 70%-75% or below) as these types of mortgages are seen as slightly higher risk due to the potential uncertainty for continuous rental premiums throughout the loan term.
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How to calculate the loan-to-value on a Shared Ownership mortgage
Shared Ownership Mortgages are the exception to the main rule when it comes to working out your LTV as it would be calculated only on the portion you own rather than the overall value of the property.
To use the example from the above section – if a house is valued at £200,000 but using the Shared Ownership scheme you’re only purchasing 75% then the LTV will be based on that amount – £150,000.
So, if you had the same equity – £50,000, you’d therefore need a mortgage for £100,000 and the LTV would now equate to 66.67% (£100,000 / £150,000 x 100). But based on the overall property value the LTV would be 50%.
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What you should do next
Once you’ve used our loan-to-value calculator you can now move on to the next step in the mortgage or remortgage process and the shrewd move now would be to seek the help of a mortgage broker who can outline all the options available to you.
The mortgage brokers we work with have been specifically selected, based on their expertise and knowledge across the whole of the mortgage market and would be best placed to help find the right solution for your circumstances.
So, get in touch or give us a call on 0808 189 2301 and we’ll arrange for a specialist advisor to contact you straight away.
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