The LTV (or loan-to-value) refers to the amount of loan you’re looking for in relation to the overall value of your property. The percentage figure is used to reflect the proportion of the property that’s mortgaged and the amount that’s yours (known as your “equity”).
A mortgage at 95% LTV will result in a loan that’s worth 95% of the value of your property – meaning that 95% of the property will be mortgaged, and you’ll have 5% equity.
The LTV also determines the amount of deposit you’ll need. If you applied for a mortgage at 95% LTV, you’d need to put down a 5% deposit, while if you were seeking a mortgage at a lower or higher LTV, the requirements would alter. The LTV you need will ultimately be based on your circumstances, the price of the property, and the amount of deposit you’ve been able to save.
Our mortgage calculator helps you to see how much your mortgage might cost you each month.
Our how much can I borrow calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.
Read our How much can I borrow for a mortgage guide to find out more about what can impact your potential sum of borrowing.
You should consider smaller banks and building societies when looking for the best 95% mortgage deals as they may have more competitive rates and offer flexibility with their mortgage underwriting.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.