What is loan to value (or LTV)?

Loan to value is the percentage of loan, normally a mortgage, compared to the value of the property.

For example a £75,000 mortgage on a property with a value of £100,000 would be a 75% loan to value.

Mortgage lenders often use LTV to restrict the maximum amount they will lend against a property.

How do you calculate loan to value (LTV)?

([mortgage value] / [property value]) * 100 = LTV

For example:

(£90,000 / £120,000) * 100 = 75%

Another common LTV calculation you might want to do is to find out how much you can borrow, given the property value and a maximum allowed LTV. This is a standard percentage calculation as follows:

([maximum LTV] / 100) * [property value] = [maximum mortgage]

For example (with an 80% LTV limit):

(80 / 100) * £120,000 = 0.8 * 120000 = £96,000

You can use the free PaTMa buy-to-let calculator to calculate and show LTV limits for you.