1. What is Loan To Value (LTV)?

The Loan To Value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. For remortgages, it shows what percentage of your property's value you're borrowing.

2. How Does the Calculator Work?

The calculator uses the LTV formula:

Where:

• \( \text{New Loan} \) — The amount you wish to borrow in the remortgage
• \( \text{Property Value} \) — The current market value of your property

Explanation: The equation calculates what percentage of your property's value your new loan represents.

3. Importance of LTV Calculation

Details: LTV is crucial for remortgaging as it affects interest rates, loan eligibility, and whether you'll need to pay for mortgage insurance. Lower LTV ratios generally secure better rates.

4. Using the Calculator

Tips: Enter the new loan amount and current property value in the same currency. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a good LTV for remortgaging?
A: Generally, LTVs below 60% get the best rates, 60-80% are standard, and above 80% may have higher rates or require insurance.

Q2: How often should I check my LTV?
A: Check whenever property values change significantly or when considering remortgaging, as improving LTV can secure better deals.

Q3: Does LTV affect remortgage approval?
A: Yes, lenders use LTV to assess risk. Higher LTVs may be harder to approve or come with stricter terms.

Q4: Can I improve my LTV?
A: Yes, by paying down your mortgage, making property improvements, or if property values in your area increase.

Q5: Is LTV the only factor in remortgage rates?
A: No, lenders also consider credit score, income, debt-to-income ratio, and other factors, but LTV is a major component.