A loan-to-value ratio (LTV) shows how much of your property’s total price is paid for by your mortgage. It’s usually expressed as a percentage. You can work it out by subtracting your deposit as a percentage from a property’s total value.
For example, a £20,000 deposit on a £100,000 home works out as 20%. Take 20% away from 100% and you’re left with an 80% LTV.
A higher LTV usually results in a mortgage with a higher interest rate because there’s more risk to the lender. If you can increase your deposit amount or buy a cheaper property in relation to your deposit, you could get a better mortgage rate.