Loan-to-value means the amount of money you wish to borrow (the loan), as compared to the value of
the property you wish to purchase (the value). The value of the property is defined as either the purchase price
or the valuation, whichever is the lower. The loan-to-value you choose may affect:
- whether or not you are eligible for a particular mortgage
- what the terms of a particular mortgage may be.
Example:
John and Jane wish to buy a property which is valued at £100,000. They plan to borrow £80,000 and provide the
remaining £20,000 themselves - meaning their loan-to-value ratio is 80%.
Suzanne and Ian's chosen property is also valued at £100,000 - but they wish to borrow £95,000 and provide only £5,000 themselves - meaning their loan-to-value ratio is 95%.
Charles and Stephen are remortgaging - their property is worth £100,000 and they have £75,000 of their existing loan outstanding, which they are transferring to an Intelligent Finance mortgage.
So their loan-to-value ratio is 75%.
All other things being equal, John and Jane may be eligible for a more attractive deal from a wider choice of mortgages than Suzanne and Ian -
and Charles and Stephen may attract the best deal of all.
To find out the loan-to-value details for any Intelligent Finance mortgage, please visit www.if.com.
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