What are LTV and LTI and why do they matter for mortgages?
Published: 12 June 2026
If you’re thinking of getting a mortgage, two terms you’ll hear a lot are loan to value (LTV) and loan to income (LTI).
Knowing what they mean could help you feel more confident about your mortgage options, so let’s break them down!
So, what does loan to value (LTV) mean?
LTV shows how much of a property’s value you’re borrowing with a mortgage – and how much you’re putting down as a deposit. You’ll usually see it shown as a percentage, such as 90% LTV or 95% LTV.
Knowing your LTV for a property you want to buy helps you find out:
- The mortgage deals you could get
- The interest rates you might be offered
- Whether you’ll need a larger deposit
How to calculate loan to value
Working out the LTV percentage is as easy as 1, 2, 3.
- Start with how much deposit you can afford and subtract that from the value of the property
- This is the amount you need to borrow - divide it by the property’s value
- Multiply by 100 to find the LTV percentage
Here’s an example (if the property value is £250,000, the deposit is £25,000 and you need to borrow £225,000):
- Property value £250,000 - deposit £25,000 = £225,000
- £225,000 ÷ £250,000 = 0.9
- 0.9 x 100 = 90% LTV
The LTV is 90%. This means the mortgage is for 90% of the property’s value and the deposit covers the other 10%.
What is the loan to value ratio?
The loan to value ratio is the balance between how much you borrow and how much you put down as a deposit.
Generally, lower LTV mortgages offer lower interest rates.
On the flip side, the higher the LTV, the bigger the mortgage you need (so it’s riskier for lenders). Because of this, interest rates are usually higher.
Saving as much as you can for a deposit will help lower your LTV - the bigger your deposit, the lower your LTV could be.
As you repay your mortgage your property value should hopefully increase. This means your LTV will reduce over time.
What is a good loan to value?
There’s no such thing as ‘good’ LTV. But a lower LTV means that you’re borrowing less which means the rates for mortgage deals could be lower. This is because the amount you need to borrow reduces.
It’s all about what’s right for you and your situation, to make sure your mortgage is affordable - now and in the future.
OK, so what is loan to income?
Your loan to income (LTI) ratio helps lenders work out the maximum you could borrow based on a multiple of your annual income before tax.
Many lenders cap borrowing at an LTI of around 4 or 4.5 times your income, but this depends on the lender and your own situation.
How to calculate LTI
To find out your LTI ratio, divide the amount you want to borrow by your annual income before tax (include both income amounts if you’re buying with someone else).
So let’s say there’s two people buying a house with a mortgage of £300,000, who have a joint annual income of £80,000.
£300,000 ÷ 80,000 = 3.75 LTI
So, what is Income Plus?
With rising costs and bigger financial pressures, we wanted to provide potential borrowers with some flexibility when it matters most.
That’s exactly why we created Income Plus. With these mortgages, depending on your income, you may be able to borrow up to 5.5x LTI, or in some cases, up to 6x LTI (you’ll need a sole or joint income of at least £75,000 for 6x LTI).
We’ll need to make sure that your property is suitable, and you can afford the mortgage repayments with our usual affordability checks and that you meet our mortgage criteria.
Whether you’re a first time buyer or looking to take that next step, Income Plus means your income could go further – helping you to buy the home you want.
Find out more about Income Plus
You’re up to date
So that’s all things LTV and LTI covered, as well as our Income Plus mortgages. Good luck on your homebuying journey!
Mortgage applicants must be 18 years or over and UK residents only.
Mortgages are subject to eligibility, status and financial standing.
Your property could be repossessed if you don't keep up your mortgage repayments.
This article is not advice, and you should seek independent financial or legal advice if needed
