What is loan to value?
Loan to value, written LTV, is the amount of a loan expressed as a percentage of the value of the property or asset it is secured on. A £260,000 loan on a building valued at £400,000 is a 65% LTV. The remaining 35%, £140,000, is the borrower’s equity, and on a purchase it is the deposit.
Every property and asset lender publishes a maximum LTV for each kind of security it takes, and the figure is the single number that decides how much a lender will advance against a given building. The figures in this answer are arithmetic on round numbers, chosen to show the calculation; they are not a rate, a limit or a figure any lender has quoted. Think carefully before borrowing. Property or other assets offered as security may be at risk if you cannot keep up repayments.
The calculation
LTV = loan ÷ value × 100. The loan is the amount advanced, before any fees that are added to it; where an arrangement fee is added to the loan rather than paid up front, the lender calculates LTV on the gross figure, which raises it. The value is the lender’s own valuation, not the price agreed with the seller.
Three illustrations on the same £400,000 valuation: a £200,000 loan is 50% LTV and £200,000 of equity; a £260,000 loan is 65% and £140,000; a £300,000 loan is 75% and £100,000. Turn the sum round and the deposit on a purchase follows: at a published maximum of 65% LTV on a £400,000 valuation, the most the lender will advance is £260,000 and the buyer finds £140,000 plus costs.
Why the valuation and not the price
A lender lends against what it could sell the property for, so it instructs its own surveyor and uses that figure. Where the valuation comes in below the agreed price, the LTV is calculated on the valuation and the loan falls with it: a £300,000 loan agreed at 75% of a £400,000 price becomes a £270,000 loan if the surveyor values the building at £360,000, and the buyer has to find the £30,000 difference or renegotiate the price. This is the point in a purchase where most deposits change.
On an investment property the surveyor also reports the market rent, and a lender may size the loan on the rent as well as on the value, taking the lower of the two results. On a trading business’s own premises the valuation is often given on two bases, with the business in occupation and vacant, and the lender decides which it lends against.
What moves the maximum a lender will go to
The kind of property, because a standard industrial unit or an office is easier to resell than a specialist building such as a care home, a petrol station or a leisure site. The use: owner-occupied against investment, and within investment the length and quality of the lease. The strength of the borrower or the tenant. Whether the charge is first or second ranking. And on bridging, the exit: a lender advances less against a property whose exit is a sale into an uncertain market than against one with a refinance already agreed. Each lender publishes its own maximum for each case, and they change.
LTV on asset finance and refinance
The same arithmetic applies to a van, a machine or a fleet, with the lender’s valuation of the asset in place of a property valuation. On a purchase the deposit is the balance above the lender’s advance; on a refinance of an asset the company already owns, the loan is a percentage of what the lender judges the asset would fetch, which is usually a forced-sale figure rather than a retail one. The asset decides the percentage more than the accounts do.
LTV, loan-to-cost and loan-to-GDV
Development lenders use two further ratios. Loan to cost is the loan as a percentage of the total cost of the project, land and build together. Loan to gross development value is the loan as a percentage of what the finished scheme is expected to sell for. A development facility is usually capped by both at once, and the lower cap sets the loan. The development finance page explains how drawdowns are released against those caps.
For property-secured lending we work with UK limited companies and LLPs only, for business and commercial purposes. Enquiring does not affect your credit score. If you apply to a lender, it runs its own credit search, which may be recorded on your file.
Frequently asked questions
Is a lower LTV always cheaper?
Each lender publishes its own pricing by LTV band, and the pattern across the market is that lower LTV bands carry lower pricing because the lender’s risk is lower. The figure for a particular case comes from the lender’s own published terms, which we show side by side; no rate is quoted here.
Does LTV include the arrangement fee?
If the fee is added to the loan, yes: the lender calculates LTV on the gross loan including the fee. If the fee is paid up front, the LTV is on the net advance. The offer letter states which.
What is combined LTV?
On a second charge, the first and second loans added together as a percentage of the value. A second-charge lender publishes a maximum combined LTV, because what matters to it is the equity left above both loans.
Can I borrow 100% of the value?
Against the property alone, a lender advances a percentage of its valuation and the borrower finds the rest. Where the shortfall is met from other security, for example a charge over a second property or an asset the company owns, the lender is still within its published LTV on each asset. Each lender publishes whether it accepts additional security.
Is CapExpand regulated?
CapExpand Ltd (FRN 1060885) is a credit broker and an Appointed Representative of White Rose Finance Group Limited (FRN 630772), which is directly authorised and regulated by the Financial Conduct Authority. We are a broker, not a lender. We work with UK limited companies and LLPs only, for business and commercial purposes. If you have a complaint, our complaints page explains how it is handled. We do not arrange regulated mortgage contracts, including properties for your own use.
How is CapExpand paid?
We will receive commission from lenders. On some cases we also charge a fee, which we set out in writing and agree with you before you proceed.
More funding questions answered
- How does a bridging loan work?Short-term borrowing secured on property, repaid in one sum from an exit; how the interest is retained, rolled up or serviced.
- How to get a bridging loanSix steps, exit first: the property and loan-to-value, the criteria check, the valuation and offer, the legal work and completion.
- What is an unsecured business loan?A fixed sum lent to a company without a charge over any asset, on its accounts and bank statements, and almost always with a personal guarantee.
- What is a floating charge?Security over a changing class of assets such as stock and book debts, which crystallises into a fixed charge on a default; how it differs from a fixed charge and what it is worth on insolvency.
- What is a decision in principle?A lender’s indication, on the papers and before a valuation or full underwriting, that it would lend a stated amount on stated terms; what it is worth and how it becomes an offer.
- What is mezzanine finance?The layer between the senior debt and the equity: a second charge or a subordinated loan that fills the gap a senior lender will not, on a development or an acquisition.
Work out your own LTV
Tell us the property, the price or valuation and the amount, and we will check the case against each lender’s published maximum before anything is sent anywhere.
Sources
Checked 26 October 2026. The figures on this page are arithmetic on round numbers chosen to show the calculation; they are not a loan-to-value limit, a rate or a deposit any lender has quoted. Each lender publishes its own maximum and they change.
Important information
Think carefully before borrowing. Property or other assets offered as security may be at risk if you cannot keep up repayments.
CapExpand Ltd (FRN 1060885) is a credit broker and an Appointed Representative of White Rose Finance Group Limited (FRN 630772), which is directly authorised and regulated by the Financial Conduct Authority. We are a broker, not a lender. We work with UK limited companies and LLPs only, for business and commercial purposes. We do not provide financial advice.