Loan to Value (LTV) is the loan amount against the value of your home. For example, a 95% LTV mortgage would mean you loan is 95% of your property value.
The higher the loan to value the lower the deposit needed. Typically the higher the LTV the more expensive the mortgage will be.
Finding the perfect mortgage yourself can be daunting. At Hello Mortgage we don’t just give you great advice, we also hold your hand throughout the entire process, whether it's buying your first home or releasing equity from your current home.
The above calculator will do this for you.
The calculation is fairly simple; if you are looking to purchase a property for £200,000 and have a deposit of £20,000 you will need a mortgage of £180,000 and your loan to value would be 90%
This is because £180,000 mortgage divided by the £200,000purchase price = 90%
The lower your LTV the cheaper your mortgage will be.
Therefore, it is so important to save as much as you can towards your deposit.
If you wanted to get the cheapest mortgage deals then you would need an LTV of 75%, this means a deposit of 25%.
A high LTV mortgage would be anything over 90% and would be more expensive in terms of the interest rate offered.
It is not possible to get a buy to let property with a 5% deposit. The minimum deposit needed is 20%, this gives an LTV of 80%.
The majority of our clients purchase a buy to let with a 75% LTV, this means they have a 25% deposit.
If you are a first time buyer looking to get onto the property ladder than a high LTV mortgage could be your life line. This means you could purchase your home with a 5% deposit mortgage
Mortgages are priced based on risk. If you have a high loan to value and the value of your property falls you home could be worth less than your mortgage. This is known as negative equity,
