Loan-to-value (LTV) explained
LTV is the number lenders care about most. Here is what it means and why a lower one usually gets you a better deal.
Written by Matt Vincent DipFA, CeMAP, CeRER, BSc · Published 25 June 2026 · Version 1.0 · 4 min readLoan-to-value, or LTV, is simply the size of your loan compared with the value of the property, shown as a percentage. Borrow £650,000 against a property worth £1,000,000 and your LTV is 65%.
Why it matters so much
LTV is the lender's main measure of risk. The more of the value you're borrowing, the more exposed the lender is if things go wrong, so a higher LTV usually means a higher rate, fewer lenders willing to help, or both.
- Lower LTV (say 60% or less), more lenders compete, and you'll generally see the keenest rates.
- Higher LTV (around 75%), this is the top end for many commercial lenders; expect fewer options and higher pricing.
Most commercial lenders cap out somewhere around 70–75% LTV, which is why a deposit of 25–35% is typical. Pushing for the maximum loan isn't always the cheapest choice once the higher rate is taken into account.
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This guide was published on 25 June 2026 (version 1.0) and reflects our understanding at that time. It is general information about commercial mortgages, not financial advice or a recommendation. Lending criteria, interest rates and tax rules change over time, so please confirm current details with a qualified advisor before acting. Reference: PL-CM-LTV-v10.