LTV (Loan-to-Value)
The mortgage amount expressed as a percentage of the property's value, determining how much you borrow versus your deposit.
Loan-to-Value (LTV) is the ratio of your mortgage to the property's value. It determines how much deposit you need and affects the interest rates available to you.
LTV = (Mortgage Amount ÷ Property Value) × 100
Typical BTL LTV Ranges
- 75% LTV — the most common BTL maximum. You put down 25% deposit.
- 80% LTV — available from some specialist lenders at higher rates.
- 60–65% LTV — often unlocks the best interest rates.
Why LTV Matters
A higher LTV means more leverage — your capital goes further, and your returns on equity can be amplified. But it also means:
- Higher monthly mortgage payments
- Greater exposure to interest rate rises
- Lower resilience during void periods
- Harder to pass ICR stress tests
Many experienced landlords deliberately target lower LTVs (60–65%) on remortgage to access cheaper rates and improve cashflow resilience. Others maximise LTV to spread capital across more properties.
LTV on Current Value vs Purchase Price
For existing properties, your effective LTV changes over time as the property value moves. If your £200,000 property is now worth £250,000 and you owe £150,000, your LTV has dropped from 75% to 60% — even without paying down the mortgage.