How do you calculate loan to value?
Your loan to value (LTV) ratio is an easy calculation that you can work out for yourself using a pen and paper plus an ordinary calculator. We've also created this infographic to help explain the concept.
First you should add up all of the debts that are secured against your property. These will include your main mortgage, any secured loans as well as any other charges made in a county court (for example, if you do not keep up repayments on an unsecured loan the lender can apply to the court for a charge to be made against your property. When you sell your home, and there's enough equity, the unsecured lender will be repaid their debt).
Then you will divide this figure by the value of your property. So for example, if the total debt secured on your home is £90,000 and the value of your property is £120,000 the LTV ratio is 0.75 (90,000 / 120,000). To turn this ratio into a percentage you simply multiply it by 100. So in the example the LTV will be 75% (0.75 * 100).