Loan to Value (LTV) is the percentage of your property's current market value that is covered by your mortgage debt. Bank Rate was 3.75% when this article was published in June 2026, but whatever the rate, LTV remains the single most important factor in determining which remortgage rates you qualify for.
Lowering your LTV typically unlocks cheaper monthly payments and a wider range of lender products. Understanding how this ratio works allows you to time your remortgage for maximum savings.
How does LTV work when remortgaging?
When you first bought your home, your LTV was determined by your deposit. When you remortgage, your LTV is determined by your current mortgage balance relative to the current market value of your home.
Because property values fluctuate and you pay down your capital each month, your LTV usually improves over time. A lower LTV represents less risk to the lender, which is why they reward you with lower interest rates.
The LTV Calculation
To calculate your LTV, divide your remaining mortgage balance by the current value of your home, then multiply by 100.
Example:
- Current Property Value: £300,000
- Existing Mortgage Balance: £225,000
- Calculation: (£225,000 ÷ £300,000) x 100 = 75% LTV
Why LTV thresholds matter in 2026
Lenders categorise their products into 'tiers' or 'brackets.' These usually move in 5% increments, such as 90%, 85%, 80%, and so on. The 'holy grail' for many homeowners is the 60% LTV bracket, where the most competitive rates in the UK market are found.
| LTV Bracket | Illustrative 2-Year Fixed Rate (example only) | Monthly Cost on £200k Balance |
|---|---|---|
| 90% | 5.15% | £1,187 |
| 75% | 4.40% | £1,100 |
| 60% | 4.10% | £1,067 |
Note: Illustrative example only — not current product rates. Figures assume a 25-year term. For exact figures, use our mortgage calculators; for guarded current-rate information see our best mortgage rates page.
Recent FCA mortgage reforms have encouraged lenders to be more transparent about these tiers. If your property has increased in value, you might find you have moved from an 85% LTV to a 75% LTV without paying off a single extra penny of debt.
How house price changes affect your remortgage
Your LTV isn't static. In the 2026 market, many UK regions have seen modest capital growth. This growth increases your 'equity'—the portion of the home you own outright.
If you bought a house for £250,000 with a £25,000 deposit (90% LTV) two years ago, and it is now worth £270,000, your LTV has dropped significantly. Combined with your monthly capital repayments, you may now be eligible for 80% LTV deals, which are considerably cheaper.
Pro Tip: Always check recent local sales on the Land Registry before remortgaging. If you think your house is worth more than the lender's automated valuation suggests, you can request a manual valuation to potentially hit a lower LTV bracket.
Can I remortgage with a high LTV?
Yes, it is possible to remortgage with a high LTV, such as 90% or even 95%. However, these products are more sensitive to market volatility. For first-time buyers who have only been in their home for two years, the jump to a lower LTV tier is the most effective way to reduce the 'payment shock' of moving from an introductory deal to a standard variable rate.
If you are currently in a high LTV bracket, we often suggest looking at 'product transfers' with your existing lender if your credit score has dipped, as they may not require a new valuation.
The impact of borrowing more
Many homeowners choose to remortgage for home improvements. While this is a common way to fund extensions or retrofitting for energy efficiency, it will increase your LTV.
If borrowing an extra £20,000 pushes you from 74% LTV to 81% LTV, you aren't just paying interest on those extra funds; you are also potentially paying a higher interest rate on your entire mortgage balance. We can help you calculate if the cost of the higher rate outweighs the benefit of the additional capital.
Valuation challenges in 2026
Lenders use different methods to determine your property's value. These include:
- AVM (Automated Valuation Model): A computer algorithm based on local data.
- Desktop Valuation: A remote check by a surveyor.
- Physical Valuation: A surveyor visits the property.
Under current FCA guidelines, if an AVM places you just 1% away from a lower LTV tier, it is often worth challenging the result or choosing a lender known for more generous valuations.
Pro Tip: If you are close to a threshold (e.g., 61% LTV), consider using a small amount of savings to pay down the balance to reach the 60% bracket. The interest savings over a five-year fix often far exceed the cash used.
What I tell my clients
When I sit down with clients, I emphasize that the 'price' of their mortgage isn't just about the BoE base rate—it's about their personal risk profile. LTV is the part of that profile you have the most control over. Even if interest rates are higher than they were five years ago, a better LTV can act as a shield against the worst of those increases. We look at the 'sweet spots' in the market together to ensure you aren't missing out on a lower bracket by a few hundred pounds.
— Matt
How to prepare for an LTV-focused remortgage
- Get an up-to-date balance: Log into your mortgage portal to see exactly what you owe today.
- Research your value: Look at similar properties sold nearby in the last 6 months.
- Check your timing: Start your mortgage guide research 6 months before your current deal ends.
- Consult an expert: We have access to over 90 lenders, including those with niche LTV brackets that might suit your specific equity position.
Whether you are looking to lower your monthly outgoings or protect your home with better insurance, understanding your LTV is the best place to start. For more specific advice on your situation, read our post on how much can I borrow or remortgaging with bad credit.
If you are ready to see which LTV tier you fall into and what rates are available for your property, get in touch with our team today at /contact.