How Lenders Calculate Your Loan-to-Value in 2026
Loan-to-value (LTV) is the ratio between the amount you want to borrow and the current market value of your home, expressed as a percentage. If your property is worth £300,000 and you owe £210,000, your LTV is 70%. Every major UK lender uses LTV to set the interest rate tier you qualify for — and the lower your LTV, the cheaper the rate.
When you remortgage, your LTV is reassessed based on a fresh valuation. This can work in your favour if property prices have risen since you bought, or if you've been overpaying to reduce the balance. Lenders typically use one of three valuation methods:
- Automated valuation model (AVM): Used by Nationwide, Halifax and Santander for straightforward remortgages under around 75% LTV. The lender checks recent sold prices in your postcode.
- Desktop valuation: A surveyor reviews the property remotely using Land Registry data, photos and neighbourhood comparables. Common at HSBC and Barclays.
- Physical valuation: A surveyor visits the property. Required for higher LTVs, unusual construction types or when the AVM cannot confirm a value.
LTV bands at most UK lenders are priced in 5% increments: 60%, 65%, 70%, 75%, 80%, 85% and 90%. A few lenders including Halifax and Nationwide also offer a super-low 50% LTV tier for the very best rates. Once your LTV crosses a threshold by even 0.1%, you move up to the next pricing tier — so it pays to calculate carefully before applying.
Best Fixed Remortgage Rates by LTV — April 2026
The table below summarises the best 2-year and 5-year fixed rates currently available in each LTV band. These are representative headline rates from high-street and mutual lenders in April 2026.
| LTV Band | Best 2-Year Fixed | Best 5-Year Fixed | Typical Lenders |
|---|---|---|---|
| 60% LTV | 4.21% | 4.11% | Nationwide, Halifax, HSBC |
| 65% LTV | 4.28% | 4.16% | Barclays, Santander, Coventry |
| 70% LTV | 4.34% | 4.22% | NatWest, Halifax, Lloyds |
| 75% LTV | 4.39% | 4.27% | Nationwide, Yorkshire, Skipton |
| 80% LTV | 4.55% | 4.44% | Virgin Money, TSB, Metro |
| 85% LTV | 4.79% | 4.61% | Leeds, Principality, Santander |
| 90% LTV | 5.12% | 4.89% | Halifax, HSBC, Nationwide |
These rates assume a standard residential remortgage with a typical arrangement fee of £999. Fee-free versions are usually available at around 0.2% higher. The cheapest 60% LTV deals often carry a larger fee of £1,499 or £1,999 — you'll need to run the numbers to see whether the fee is worthwhile for your loan size.
The gap between 60% LTV and 90% LTV on a 5-year fix is currently around 0.78% — substantial when applied to a mortgage over 25 years. On a £250,000 loan, that's roughly £110 extra per month, or £33,000 over the fix.
Worked Example: The Real Cost of LTV Tiers
To show how much LTV matters, consider Sarah and James, who own a £325,000 home in Birmingham with £227,500 outstanding on their mortgage. That puts them at exactly 70% LTV. They're weighing up whether to overpay £10,000 from savings before remortgaging, which would bring the balance down to £217,500 — dropping them to 67% LTV, still within the 70% band.
Overpaying £10,000 alone doesn't change their LTV band, so the rate stays the same. But a modest revaluation — say, the house has risen to £340,000 — combined with the overpayment would move them to 64% LTV, unlocking the 65% LTV rate tier. The numbers look like this:
| Scenario | LTV | Rate (5-yr fix) | Monthly Payment | 5-Year Total Cost |
|---|---|---|---|---|
| No action | 70% | 4.22% | £1,229 | £73,740 |
| Overpay £10,000 | 67% | 4.22% | £1,175 | £70,500 |
| Overpay + revaluation | 64% | 4.16% | £1,168 | £70,080 |
| Overpay + drop to 60% LTV | 60% | 4.11% | £1,159 | £69,540 |
Crossing into the 65% or 60% LTV band saves a small amount monthly but opens up significantly better deals on future remortgages, and gives Sarah and James access to lender-exclusive products that aren't offered above 75%. If you're close to a threshold, it's almost always worth closing the gap before submitting your application.
Why 60% LTV Rates Are the Cheapest
Lenders view borrowers at 60% LTV or below as the lowest possible risk: even if house prices fell by 40%, the lender could still recover the full loan in a repossession sale. This translates directly into pricing — at 60% LTV, Nationwide, Halifax and HSBC are routinely offering 5-year fixes at 4.11–4.15% in April 2026, compared with 4.89–5.02% at 90% LTV.
Beyond risk, the 60% LTV tier is where lenders compete most aggressively to win market share. Mutuals like Coventry, Yorkshire and Skipton often lead the best-buy tables here because they can undercut the banks on profit margins. The very cheapest deals are usually reserved for borrowers with clean credit, employed income and a loan between £100,000 and £500,000 — the sweet spot for automated processing.
If you're within touching distance of 60% LTV, consider:
- Using cash savings: Even a £5,000 overpayment can tip you into the next tier if you're close.
- Requesting a revaluation: Halifax, Nationwide and Santander all allow you to challenge their automated valuation if you have evidence of a higher market value.
- Timing the remortgage: House price growth in your area may have closed the gap without you realising.
The Financial Conduct Authority (FCA) requires lenders to treat customers fairly, which includes being transparent about LTV-based pricing — so don't be afraid to ask your lender or broker for a breakdown of exactly which band you fall into and what alternative rates look like in lower tiers.
