Finance Calculator
Loan-to-Value Calculator
Assess your security position for secured lending. Enter your loan amount, asset or property value, and any existing charges to calculate your LTV ratio and understand how lenders may view the proposition.
Enter your loan and asset details
How is LTV calculated?
Loan-to-value (LTV) is a fundamental metric in secured lending. It measures the proportion of an asset's value that is being borrowed against, giving lenders a clear picture of the security buffer — the equity cushion — protecting their position.
A lower LTV means more equity in the asset and less risk for the lender. This typically translates to better rates, more flexible terms, and a higher likelihood of approval. Conversely, a high LTV increases lender exposure and may lead to higher pricing or additional requirements.
The assessment thresholds used in this calculator are:
- Below 60% — Conservative: Strong equity position. Typically attracts the best rates and terms.
- 60% to 75% — Standard: Mainstream commercial lending range. Good balance of gearing and security.
- 75% to 85% — Higher LTV: May attract higher rates or require additional security or personal guarantees.
- Above 85% — High Risk: Limited equity buffer. Many lenders will not lend above this threshold.
The formulas used in this calculator are:
LTV = (Loan Amount + Existing Charges) / Asset Value × 100
Equity Amount = Asset Value − Loan Amount − Existing Charges
Equity % = 100 − LTV
Assumptions and caveats
- •The asset value entered should reflect the current open market value. Lenders may instruct a formal valuation which could differ from your estimate.
- •Some lenders use a "forced sale" or "90-day" valuation which can be significantly lower than open market value, resulting in a higher effective LTV.
- •Existing charges include any current mortgages, second charges, or liens registered against the asset. Ensure all are included for an accurate result.
- •LTV thresholds vary by lender and asset type. Commercial property, residential property, and plant & machinery may have different maximum LTV limits.
- •Results are indicative only. Contact a finance specialist for a formal security assessment.
Frequently asked questions
Loan-to-value (LTV) is a ratio that expresses the size of a loan as a percentage of the value of the asset used as security. For example, a £150,000 loan against a £200,000 property gives an LTV of 75%. It is a key metric lenders use to assess the risk of secured lending.
Generally, an LTV below 60% is considered conservative and will typically attract the best interest rates and terms. An LTV of 60% to 75% is standard for most commercial lending. Above 75% is considered higher LTV and may carry higher rates or require additional security.
Lower LTV ratios represent less risk for the lender, typically resulting in lower interest rates, more favourable terms, and easier approval. Higher LTV ratios may lead to higher rates, additional covenants, or requirements for personal guarantees or additional security.
Yes. When calculating LTV, lenders consider all charges against the asset — including existing mortgages, second charges, and any other liens. The total debt secured against the asset, not just the new loan, determines the true LTV position.
Need help with secured lending?
Speak to the Spark team about secured finance options and understanding your security position.
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