LTV calculator
Loan-to-value is your loan as a percentage of the property's value. It is one of the biggest inputs into the rate you are offered — and because lenders price in bands rather than on a sliding scale, where you sit relative to a threshold matters more than the raw number.
What loan-to-value actually decides
Answer first: it decides which pricing tier a lender will offer you. LTV measures the lender's exposure — the more equity you hold, the smaller its risk, and the better the rate it can justify. It is not the only factor in your rate, but it is one of the few you can actively change.
The detail most people miss is that lenders do not price LTV smoothly. Products are offered up to set ceilings, so moving from just above a threshold to just below it can shift you into an entirely different range. A relatively small increase in deposit can therefore be worth far more than a large one that leaves you in the same band. How LTV drives your rate covers this in full.
Where LTV catches contractors out
Indirectly, and expensively. If a lender assesses you from the minimised profit on your tax return rather than your contract, it caps your borrowing — and to complete the purchase you either find more deposit or accept a higher LTV on a cheaper property. Either way the income assessment, not your finances, has decided your band.
So the sequence matters: establish which lenders will read your gross day rate through contract-based underwriting first, then optimise LTV among those. Check what a proper assessment produces on the contractor mortgage calculator.
At remortgage, check it again
Your LTV is based on the property's current value, not what you paid. If prices have risen since you bought, and you have repaid capital in the meantime, you may already sit in a better band than your existing rate reflects — without paying anything.
It works the other way too, so it is better established early than discovered mid-application. Either way, checking before you remortgage costs nothing.
LTV, answered
How do I calculate loan-to-value?+
Divide the mortgage by the property's value and multiply by 100. Borrow £180,000 against a £200,000 property and your LTV is 90%. The calculator does this from your property value and deposit, and also shows the loan amount that results.
What LTV do I need for a good rate?+
Generally the lower the better, but what matters most is which side of a lender's band boundary you fall on. Because products are offered up to set ceilings, moving just below a threshold can access a materially better tier, while a larger increase within the same band changes little.
Does LTV use the purchase price or the valuation?+
The lender uses its own valuation of the property, which is normally the purchase price on a purchase but the current market value on a remortgage. That distinction is why rising prices can lower your LTV at remortgage without you paying anything in.
Can I lower my LTV without more deposit?+
At remortgage, yes — through capital repaid and any rise in the property's value. On a purchase, the levers are a larger deposit or a cheaper property. Improvements that raise the valuation can also help, though lenders vary in how they treat recent work.