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What does a loan to value mean?

Loan to value means the % borrowed against the value of the property.

Example – The property you are purchasing is £200,000, and you have a deposit of £20,000 this would be a loan to value (LTV) of 90%.

Your home now is valued at £500,000. However you still have an outstanding mortgage of £250,000- so your LTV is 50%.

Generally, the higher the loan to value, the interest rate will increase. Therefore if you have a larger deposit or equity in your home, you will typically achieve a better interest rate.

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