Over time Britons may be able to save hundreds each month as the amount of equity they own of the house has increased. On the Cash Chats Podcast, Andy Webb explained what Loan to Value is, and how exactly it can save people off their mortgage.
He said: “If you originally bought a house for £300,000 and you had a £30,000 deposit you would have had – when you bought it – an LTV of 90 percent and the mortgage loan would have been £270,000.”
LTV is measured in bands – They usually start from around 95 percent and go down to 60 percent, so depending on the lender people can get LTV of 95, 90, 85, 80 etc.
He continued: “Each time you move down these bands, you can get access to lower interest rates, so the best rates on the market, you might only be able to get them with a LTV of 60 percent.