Confused about LTV

Wolfchild24

I’ve got a question on deposits and LTV as I need clarification.
Say I have £10,000 deposit but I am looking to buy a house with a home report value of £135,000 and I want to get a mortgage at 90% LTV.

So I would need £13,500 deposit for it to count as a 10% deposit.

My understanding is that an LTV is the mortgage amount compared to the value of the property.

Now say I put an offer down on the house for £130,000 which was accepted. And I pay the £10,000 as a deposit (which I know it is not 10% of £130,000). This would mean I would require a mortgage of £120,000 which is 89% of the home report value of the property. But the £120,000 is only roughly 92% of the purchase price offered.

My question is, based on the scenario above, would I be able to get a 90% LTV with a mortgage provider as I am borrowing 89% of the value of the property?

Or would it be classed as a 95% LTV based on the purchase price of the property and not the home report valuation? (In which case when does LTV actually come into play if it’s not the value of the property but the price paid on the property that is considered?)

Any help is appreciated

YHM

LTV is based on the lower of the purchase price and the property valuation.

dimbo61

To get the best rate you would be better off paying Just over 10% deposit.
So if you are paying £130,000 for a property even £13,500 would be better

minimike2

dimbo61 wrote: »

To get the best rate you would be better off paying Just over 10% deposit.
So if you are paying £130,000 for a property even £13,500 would be better

Whilst it is always best to borrow as little as you possibly can, the LTV limits are "up to and including". It will make no difference on a 90% product to make it 89.5% or whatever, other than you will be getting charged less interest due to the lower borrowing amount. The interest rate of charge will remain the same.

Unless the lender happens to have a product with a MAX LTV of 89.5%, which is highly unlikely.

85% on the other hand.....