LTV (Loan to Value): Glossary - Business Expert
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LTV (Loan to Value): Glossary

Loan to value sets the loan against what the security is worth, and the basis moves with the product. Development lenders measure against the finished value rather than the site you own today, so ask what any quoted percentage is a percentage of.

Mike Smith
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Mike Smith
Updated on 28 August 2026
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LTV (Loan to Value) is the ratio of a loan amount to the value of the asset used as security, expressed as a percentage. It is the primary measure of risk in property-secured lending.

Calculation

LTV = (Loan Amount ÷ Property Value) × 100

A £300,000 loan on a property valued at £400,000 = 75% LTV.

Higher LTV means the lender is providing a larger proportion of the property’s value. If the property falls in value, a high-LTV loan becomes riskier to recover.

LTV in Different Products

Residential mortgages: Typically up to 95% LTV for regulated residential mortgages; lower for buy-to-let.

Bridging loans: Typically up to 70–80% on standard residential property; lower on commercial.

Commercial mortgages: Typically up to 65–75% LTV.

Development finance: Often calculated as a percentage of Gross Development Value (GDV) rather than current site value: typically up to 60–65% of GDV.

Net vs Gross LTV

In development finance, lenders may distinguish between:
– Gross LTV: loan amount as a percentage of GDV
– Net LTV: loan amount as a percentage of current site or property value

Always confirm which basis is being used.

Day One LTV and Completion LTV

For phased projects, some lenders assess LTV both at the start of a loan (day one LTV) and at the projected end (completion LTV). Both must be within the lender’s limits.

  • GDV (Gross Development Value): the projected value of a development on completion
  • LTGDV (Loan to Gross Development Value): the development finance equivalent of LTV
  • Security: the asset used to back a loan