Pricing
Loan to Value (LTV)
Loan to value is your existing mortgage plus the new secured loan, expressed as a percentage of the property's value. It's the single biggest factor in determining your secured loan rate.
On a secured loan, lenders look at combined LTV — the total of any existing mortgage plus the new loan, divided by the current property value. A £40,000 secured loan on top of a £150,000 mortgage on a property worth £300,000 is 63% combined LTV.
Lower combined LTV means lower lender risk, which translates directly into a cheaper rate. The market's most competitive rates appear below 65% LTV. Above 75% LTV, fewer lenders are available and rates increase by 1–2%. Above 85% LTV is specialist territory only — typically Selina Finance, Central Trust Plan 5, or Evolution Money.
If your combined LTV puts you above a lender's cap, you have two options: reduce the loan amount, or pay down some of the existing mortgage to lower the LTV first. A small reduction in LTV often unlocks a meaningfully better rate.
Formula
Combined LTV = (existing mortgage + new secured loan) ÷ property value × 100
Worked example
Property value £350,000, existing mortgage £180,000, new secured loan £50,000. Combined LTV = (180,000 + 50,000) ÷ 350,000 × 100 = 65.7%. This sits in the prime rate band on most lenders.