Spellman Financial Services

What is LTV in Mortgages?

Get a quotation

What is loan to value?

Loan to value in Mortgage terms is the percentage of your Mortgage in comparison to your property value.

Loan to value example:

Property purchase of £200,000

And a Mortgage of £180,000

Equals a loan to value of 90%. Because the Mortgage is 90% of the value of the property.

The £20,000 difference would be your deposit. In this case the deposit would be 10%.

Why Loan to Value is important

If Mortgage Lenders need to repossess your property due to you not being able to keep up with repayments on your Mortgage.

The smaller the Mortgage is in comparison to your property value, the greater chance your Mortgage Lender has of getting the Mortgage back.

This is why the bigger your deposit is, the smaller your interest rate will be that you pay to the Lender in comparison to those with a smaller deposit.

What is a good loan to value ratio?

To get the best deals, generally you will have to have around a 25% deposit. Which would be 75% loan to value.

This is a unrealistic target to most First Time Buyers, unless you are purchasing a new build property through the Help to Buy Scheme.

This is because you’re 20-40% (depending where you’re buying) equity loan can be used toward your deposit.

In recent years many have been able to obtain a Mortgage with a 5% deposit (95% LTV).

This is still the case in some instances. So it is worth speaking with our Mortgage Brokers to see if this is still doable.

The current minimum deposit in many cases will be 10% (90% LTV).

Need to knows

Having a high loan to value isn’t just a risk to Mortgage Lenders.

There is also a risk to yourself of falling into something called negative equity. 

Equity is the same as your deposit.

Negative equity is where you do not have any equity or deposit in your home. So your Mortgage is a higher value than your home is worth.

This happens when the value of your property falls to a level below your Mortgage.

I.e. Mortgage of £180,000 and a property value of £170,000.

Why use ourselves?

Our Mortgage Advice is rated 5 stars by our customers on Google, VouchedFor, Facebook and Trustpilot.

We can provide face to face advice to customers in Coventry & Warwickshire. Or a telephony/video call service if you prefer, for Local or National Customers.

Luke Spellman, the Mortgage Broker you will speak to, has over 10 years experience in Financial Services. 5 of which has been spent working directly with Mortgages.

So for simply more information and for a non-obligatory free chat. Please contact us below.

 

Get in touch

Spellman Financial Services is a Mortgage Brokers in Coventry providing Mortgage advice to the people of Coventry & Warwickshire.

If you would like any individual advice or further information on any of the above or alternative Mortgage or Insurance Advice. Please do get in touch with us below of here.

Get in touch!

If you need Expert Mortgage Advice. Please complete the below contact form and we will get in touch within one working day.

Please note

The information provided will only be used to contact you and will not be held for marketing purposes.

Address & Telephone

102 Stoney Road, Coventry, West Midlands, CV3 6HY
Telephone: 07739387944

Opening Hours

Monday-Friday: 08:00 – 20:00
Saturday: 08:00 – 14:00
Sunday: By appointment
Other times: can be arranged by appointment

Spellman Financial Services is an Appointed Representative of Openwork Ltd, which is authorised and regulated by the Financial Conduct Authority

Spellman Financial Services is registered for Data Protection purposes through the Information Commissioners Office