What is Loan to Value (LTV) - in 60 Seconds | Money Right UK
when buying a property - especially for the first time, there will be a lot of jargon that is new to you. One of the most common terms is 'Loan to Value' / 'LTV'. Your Loan to Value will tell a mortgage lender how much of the property you own as a % amount. Once your LTV is known, they will present to you the different products available. The higher your LTV is the higher the interest rate you need to pay. Here is a couple of examples. Option 1 You buy a home worth £100,000 and you have a £10,000 deposit (10%). You will need to borrow the remaining £90,000 from the bank (90%). The 90% borrowed from the bank is your LTV. Option 2 You buy a home worth £100,000 and you have a £20,000 deposit (20%). You will need to borrow the remaining £80,000 from the bank (80%). The 80% borrowed from the bank is your LTV. The bank would likely charge you more interest for option 1 because you are borrowing more money which increases the risk of you not repaying. Our mission at Money Right UK is to explain the world of finance in a way that is simple. Do you want to get a free stock share worth up to £100? Create a Trading 212 Invest account using this link www.trading212.com/invite/FffgmWKW Follow our social media pages here: Instagram - https://www.instagram.com/moneyrightuk/ Facebook - https://www.facebook.com/moneyrightuk/ Twitter - https://twitter.com/MoneyrightUk TikTok - https://vm.tiktok.com/vM3euo/ please subscribe by clicking below: https://bit.ly/MoneyRightUK
when buying a property - especially for the first time, there will be a lot of jargon that is new to you. One of the most common terms is 'Loan to Value' / 'LTV'. Your Loan to Value will tell a mortgage lender how much of the property you own as a % amount. Once your LTV is known, they will present to you the different products available. The higher your LTV is the higher the interest rate you need to pay. Here is a couple of examples. Option 1 You buy a home worth £100,000 and you have a £10,000 deposit (10%). You will need to borrow the remaining £90,000 from the bank (90%). The 90% borrowed from the bank is your LTV. Option 2 You buy a home worth £100,000 and you have a £20,000 deposit (20%). You will need to borrow the remaining £80,000 from the bank (80%). The 80% borrowed from the bank is your LTV. The bank would likely charge you more interest for option 1 because you are borrowing more money which increases the risk of you not repaying. Our mission at Money Right UK is to explain the world of finance in a way that is simple. Do you want to get a free stock share worth up to £100? Create a Trading 212 Invest account using this link www.trading212.com/invite/FffgmWKW Follow our social media pages here: Instagram - https://www.instagram.com/moneyrightuk/ Facebook - https://www.facebook.com/moneyrightuk/ Twitter - https://twitter.com/MoneyrightUk TikTok - https://vm.tiktok.com/vM3euo/ please subscribe by clicking below: https://bit.ly/MoneyRightUK