2 min read
Definition
Loan-to-value (LTV) is the loan amount divided by the value of the asset securing it. A £150,000 loan against a £200,000 property is a 75% LTV. A lower LTV means more equity cushioning the lender, which usually earns better terms.
Where it applies
LTV matters on asset finance, commercial mortgages and other secured lending. It does not apply to unsecured, cash-flow-based borrowing. See secured vs unsecured.
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