LTV (Loan to Value Rate)
The LTV (Loan to Value Rate) is the proportion of the value of an asset that a loan makes up. For example, if a mortgage for £80,000 was taken out on a property worth £100,000, the LTV would be 80 per cent.
LTVs are most frequently seen on mortgage documents. This is because when taking out a secured loan backed by an asset (in the case of a mortgage, a house) the higher the LTV, the riskier the loan for the lender.
As such, many mortgage deals have a "maximum LTV" – the largest percentage of the value of the house that the bank or building society will offer a loan for.
The lower the LTV, the better value deals customers can achieve. A typical maximum LTV for a mortgage is about 85 per cent.